RECAP OF ABOVE:
I struggle a bit understanding this discussion, but I think I have the general idea. Vitalik is able to show that a continual censorship scheme will fall apart as valid but delayed txs build up. pmcgoohan points out that only a short term censorship is needed to extract MEV, and that by making short term censorship as a service easier, this will increase the centralization and MEV extraction that the original proposal was thought to reduce.
FIXING ICE CREAM SALES:
To this discussion I want to add a minor point to the ice cream example that both ice cream sellers can instead have a bidding war of credible commitments to censor should the competition attempt a transaction to sell their ice cream. Such credible commitments would deter the other party from attempting the tx, and the price for a credible commitment is nearly free, so the ice cream sellers could easily avoid sending all of their profits to the miner. To prevent one ice cream seller from overcharging, the buyer that is aware of fair price can set a maximum price, or the sellers could make a credible price commitment in advance. I think these together solve the ice cream problem, but I did not take the time to consider if solutions down this route are practical to be generalized across all kinds of MEV.
TIME INCLUSION MARKET INTRO:
Something I came up with several months ago is a guaranteed time based inclusion market. I mentioned to some coworkers and a tweet, but this seems like a good time to pitch the concept because it may assist in mitigating or solving the problems discussed here.
It could be done with on the smart contract layer though with additional gas costs, but would be better as an offchain service and even better as a protocol level improvement. Where it is appropriate to implement is another question that can come later. For now I just want to pitch the mechanics of such a system.
It started when it occurred to me I often have transactions where I do not care about when they are processed as long as they are processed within the next 24 hours. If the overall cost to me is lower than the slow gas cost, yet I also have a guarantee of inclusion, I would be willing to pay for this guarantee. So would many others. Selecting a time limit for transaction processing is also a better user experience, as this is actually what users care about. Wallets know this and present to user guesses of inclusion time, but predictions fall apart mere minutes into the future. To the point where wallets don’t even bother suggesting a gas price for more than 10 minutes into the future. Even under 10 minutes there exists uncertainty that users would pay to eliminate but have no venue.
Those willing to take on gas price exposure select from analogue spectrum of time frames and for each time they select, they offer a price. For example, for 10 minutes in the future, they may select 80 gwei. For 1 hour they may select 70 gwei, and for 24 hours they may select 60 gwei. They select these prices because in their estimation and possibly by comparing competing bids have predicted on average they will be able to include the transaction within the specified time for less than the offered price. To incentivize the guaranteers to process the transaction even at a possible loss, they are required to place a bond such as 10 times the contracted rate. The user gets the entire bond should the transaction not get processed in the contracted amount of time.
Other inclusion offerers will also select various times and make commitments. To link together multiple arbitrary times with different arbitrary prices, the protocol can assume a linear transition between each offers. For example, if a guaranteer specified 70 gwei for 1 hour and 60 gwei for 24 hours, then the protocol assumes that they are also offering to process a transaction within 12 hours for 65.2 gwei. Essentially each guaranteer that makes 2 or more offers is also making an offer for all time choices between their offers.
The user then can see the best price offered by any guaranteer for any arbitrary time and contract with them. If they want their loan repayment transaction to get processed within the next 22.7 hours, they will have someone to guarantee that for them, and they will be able to get a price better than metamask would have offered for a 10 minute inclusion despite the on average profit the guaranteers are making. I believe adding this optional layer on top of any transaction bidding system would be preferred by all users to the point a large portion would use it.
Such a system would also improve resistance to censorship. A miner would be aware of the guarantee and would know for sure the guaranteer is willing to spend up to the bonded amount bypassing the censorship to get the transaction through.
In the context of censorship though some subgames would probably arise and I have not mentally applied this extensively to the impact on censorship yet. Perhaps the miners try to stop the guaranteer from making the contract, perhaps the guaranteer can tell that an incoming transaction is likely to be censored and doesnt want to make the deal, perhaps the protocol forces the guarenteers to be neutral and accept all offers to prevent this. Lots of depth here, but for now just want to start off with pitching this idea that I think will improve any blockchain especially if it was built into the base protocol as an optional transaction type.