Intro to the PBS Foundation

Over the past year, I’ve been very fortunate to have been able to work with the PBS Foundation as a member of the research review committee, helping to review research and research proposals, and working with people to help with their grant applications. It’s been a privilege to work with some incredibly smart people and to see such high quality and interesting research. I’d like to take this opportunity to share some information about the PBS Foundation and why I think it’s valuable, and to try to raise some awareness about the work it’s doing.

Supporting research into proposer-builder-separation in Ethereum

The PBS Foundation was set up as an independent, non-profit initiative to support research collaboration across the Ethereum ecosystem that is broadly related to proposer-builder-separation. The mission of the PBS Foundation is to protect the decentralization of the Ethereum consensus layer and to do this by helping to support research within the broad PBS design philosophy. To this end, the PBSF collaborates with various industry participants, academic researchers, as well as independent researchers and developers, to fund research, education, and neutral infrastructure. By funding research grants and connecting people, the PBSF aims to highlight and address the biggest challenges facing PBS design, and ultimately aims to support a maximally decentralized validator set.

What is the story behind the PBSF?

The PBS Foundation was officially set up on September 15, 2023, (one year anniversary of the merge). The idea was originally driven by Tina Zhen, and was originally proposed in a forum post on the Flashbots forum. Tina subsequently solicited help from Eugene Leventhal and various other volunteers to help set up the foundation and write the first request-for-proposals (RFPs).

The PBSF raised $1M USDC from various organizations in the space, including Consensys, Coinbase, Fenbushi Capital, Flashbots, Paradigm, and Uniswap Foundation, as well as a contribution from Vitalik Buterin.

The funds are overseen by two review committees, one for research and one for infrastructure. The infrastructure review committee provides grants to operators of independent and credibly neutral infrastructure, including mev-boost relays. The research review committee oversees funding of research grants for various pieces of research broadly related to PBS.

The review committee is quite active and reviews all incoming research proposals, working with researchers to refine scope and deliverables, and sometimes helping to mentor and work with the grantees and review progress milestones as the projects progress. The research committee also helps to refine the strategy and direction of the PBSF on an ongoing basis.

Since its inception, the PBSF has funded a number of research grants and worked with the grantees on their projects. The scope of research funding was initially defined as as:

• Infrastructure grants
• Data transparency grants
• Community education grants
• Research grants

The above categories defined a broad exploration space, and we created some initial RFPs as a guide to what sort of proposals we were looking to fund. The initial RFPs were quite broad, and we’ve been working on iterating and refining the scope for research we want to fund.

What are some of the things that the PBS Foundation has funded?

At the time of writing, the PBSF has issued a total of $213,000 USDC in grants, which include:

• 4 research grants
• 2 education and event grants
• 1 infrastructure support grant

Below is an overview of the grants that have been awarded to date.

Infrastructure grants

One of the important things that the PBS Foundation does is to issue grants to operators of neutral and independent infrastructure. As such, we have issued a grant to an independent relay (Aestus) to support their operations. The Aestus mev-boost relay is a neutral, non-censoring relay for Ethereum validators and block builders. Aestus was originally set up to fill the gap between the Merge and the development of enshrined proposer-builder separation (“ePBS”) within the Ethereum core protocol. Aestus intends to remain in operation until ePBS is implemented and the PBSF is proud to support their efforts.

Research Grants

Intentionally offchain

The scope of this research includes: 1) creating a taxonomy of different off-chain transactions that are settled on-chain such as UniswapX, CowSwap, etc. 2) understanding who has access to being a solver for these transactions and where these transactions are being propagated and 3) understanding and quantifying the value of these flows from users to solvers to searchers to builders.

The reason this research is so important is that the future is going to have more offchain transactions as transacting on L1 has become increasingly more expensive. Two paradigms of scaling are L2s vs. shifting smart contract logic off chain through batch auctions, coprocessors, etc. and it’s these transactions that will have more and more value associated with them that can be potentially consensus destabilizing.

The research aims to help developers to make prudent decisions in their dApp design to ensure equal access to private orderflow to ensure competitive markets and prevent negative externalities that degrade usability for all users.

Optimizing dynamic AMM fees to redistribute LVR to LPs

This project entails many different aspects, starting with simulating different dynamic fee functions using only on-chain inputs to see what oracle-free functions would best redistribute LVR back to LPs without hurting uninformed traders, for example, using volatility or first-access auctions. The team also simulates similar fee functions but also allow off-chain inputs such as CEX intrablock volatility and liquidity to be included.

Ultimately the research aims to create an interactive tool for LPs to help with pool selection and understand pool risk parameters, and will explore what could be efficient parameters for an oracle to report these values.

The value of this research is that it will help to better understand how LP fees should be set to mitigate the negative effects of LVR. It will provide concrete fee functions that can be implemented in LP pools, and will help to spark discussion on how to redistribute LVR.

GeoDec

The GeoDec research project focused on exploring PoS blockchain validators’ geospatial distribution and devising mechanisms to improve geospatial participation, focusing on consensus constructs like proposer selection. The team is focused on fast finality consensus mechanisms, namely HotStuff, Tendermint, and Narwhal/BullShark. These align with Ethereum’s roadmap for single shot consensus and are increasingly adopted by sequencer networks such as zkSync, Starknet, and Espresso.

Initially, the team will develop an emulator that inputs geospatial locations, runs selected consensus mechanisms at provided geospatial locations, and outputs key metrics. This emulator will emulate locations in a local cluster using a network emulator, applying artificial latencies based on ping data.

The research team aims to also design a proposer selection mechanism that considers geospatial distribution, as well as deploying the protocol with the revised proposer selection mechanism and evaluating its impact on decentralization. Decentralization will be measured by comparing the diversity of proposers against existing baselines. This research will help to better understand and improve the geographic distribution of validators in POS consensus protocols.

Optimizing for PBS in Ethereum L2s: Addressing Centralization and MEV Challenges

This project focused on the Development of an Assessment Rubric for L2 PBS Strategies. This research will formulate a detailed rubric designed to evaluate Layer 2 PBS strategies. The rubric will incorporate criteria such as leader selection in sequencing, including token delegation and distribution, block building, and their impacts on equitable MEV distribution among participants. This tool aims to provide L2 developers and the wider blockchain community with a standardized method for assessing and improving PBS approaches in terms of fairness and efficiency.

Education and Event Grants

ZuBerlin

ZuBerlin is an immersive two week residency to enable cross-pollination at the cutting edge of technology. It closes the gap between a hacker house (super small, long time period) and a conference (large, short term period), and enables more depth, personal connection, and exchange through co-living. Combined with bringing together different fields of technological innovation and coordination, this residency creates a unique environment where unforeseen novel ideas and concepts can emerge and flourish. This was very valuable and productive in relation to PBS as it allowed for a number of full days of presentations and workshops, which resulted in progress being made in areas such as based sequencing, pre-confirmations, attester-proposer-separation and more.

Deep dive quarterly reports, biweekly updates and IRL meetups for Spanish speaker communities.

The purpose of this grant was to provide funds for conducting two quarterly analyses on PBS in March and July. These analyses delved into various topics such as MEV, Relayers, PBS, and Inclusion Lists. Additionally, the team hosted a number of in-person meetups in Latin America, specifically in Mexico, Colombia, and Honduras. Furthermore, they plan to provide six months of biweekly updates on PBS and MEV developments, ensuring the community stays informed about the ongoing progress. All updates and analyses will be presented in Spanish to cater to the regional audience. The importance of this research is to make the research into the broader area of PBS more accessible to researchers in Latin America and supporting contributions from those researchers. You can find out more about this valuable educational project on the Kairos notion page.

What is the future for the PBS foundation?

The PBS Foundation held a roundtable discussion with people from many parts of the ecosystem, on July 13th in Brussels, Belgium. The discussion lasted several hours and allowed people to voice their questions, concerns, criticism, and suggestions. The objective was to come away with a better understanding of what the mandate of the PBSF was, how we should refine our approach, and what we should focus on moving forward. The notes below are takeaways from the roundtable and broadly represent the views of various individuals that attended, and form the basis for how the PBSF will refine its mandate and activities it focuses on moving forward.

Responses and Topics Discussed

Below is a description of some of the topics of conversations and points that were made during the round-table discussion.

Funding of Research

One observation made was that some important research topics are not getting funded, and sometimes they are not being funded because there is a misconception that researchers affiliated with large organizations can easily get their research funded by those organizations.

An idea discussed in response to this is to create “domain allocators”. These would be individuals that would be well suited to managing grants and soliciting research in specific areas. For example, a domain allocator would have a budget (e.g. $50K) that they could allocate to PhD students or other, to fund research grants into specific topics within a particular domain of research. The objectives would be scoped for each domain that has an allocator, and domain allocators would be appointed based on their expertise in a specific domain, and the need for research in that domain.

Another related idea that was discussed is to ask relevant organizations (e.g. Ethereum Foundation, Flashbots, Uniswap etc.) to make a list or backlog of ideas or research topics that they think are important but that they are unable to undertake themselves, and to put these ideas into a common pool. This would help to give some visibility into potential blind-spots and under-researched areas of importance.

Research Legibility

One topic of conversation where multiple people voiced concern was with regards to the amount of noise in the Ethereum research space at the moment. There is a huge volume of research being published on various forums, including ethresear.ch, and most people find it impossible to keep track of it, and are overwhelmed by its sheer volume. Moreover, there is a lot of variability in the quality and legibility of the research.

This surfaced a suggestion that the PBSF should somehow encourage researchers to label the status / stage of their research that they publish on various forums. For example, RIG does a good job of labeling their pieces of research. Labels could include “this is early stage”, “this is just an idea”, “this is relatively advanced” and so on. The PBSF could develop and issue guidelines for labeling research, and also create guidelines on how the research posts can be structured and presented.

Another issue that was identified was that there is currently a lack of incentive to review research. This means that some research posts receive a lot of attention and spark a lot of discussion and debate while other pieces of research receive very little attention, despite how potentially important they are.

It was briefly discussed that some sort of quarterly journal for peer review would be helpful, especially if it maintained a high standard of quality of publishing. This could be a way to combat the “noise” problem that ethereum research has at the moment, and would allow those that are not as well known or have fewer connections in the space to access valuable peer review. This idea is an open topic for further discussion and deliberation.

Mandate of PBSF

A topic that was discussed at length was what the mandate of the PBSF should be. The Ethereum Foundation is funding a lot of research, which begs the question: what is the mandate of the PBS Foundation? What is the difference between the EF and the PBSF and are they duplicating effort?

The broad consensus was that the PBS Foundation can be a place where loose conversations can happen, where consensus can happen, but that maybe it should be more opinionated. It should be Independent from the EF, and have its own opinions.

The discussions surfaced the insight that the PBS Foundation should provide more than just grants. The PBS Foundation can be a credibly neutral schelling point that can help people to navigate the debates around various topics of research. It can also help to tackle the legibility issue that we have in research in Ethereum at the moment, and it can help people to keep track of debate. The focus should not just be about funding (the lack of capital is not the biggest problem) but also about driving rough consensus, and helping to avoid any conflict between parties with opposing views on certain subjects.

Rough consensus building in a way that people can follow is very valuable, and this is where the PBSF can provide support, by helping with ideas that people have but that they don’t know how to embed in the fabric of conversations.

One concrete way this could be achieved is in developing a “tech tree”, or taxonomy for the space. A tech tree, or research dependency map, is more useful than just funding by itself. It would allow researchers to more easily answer the question: “are we researching the right problems and are we building on each other’s work, and are there important areas that aren’t getting enough attention”.

Specific important areas that were highlighted for the PBSF to focus on and provide support for:

• Censorship Resistance and Distributed Block Building
• Privacy / programmable privacy
• Multi-block MEV
• How do LPs get more of the MEV capture, and not just block builders
• How to maintain a maximally decentralized validator set
• Blob market design, making sure everyone is included in the conversation
• How to get rid of the dependency on the relay is an important topic of research
• Preconfs on blobs could solve a lot of problems, because we take it out of the critical path, and it avoids the latency issues (preconfs for blobs only is pretty uncontentious), but there is no agreement / alignment on how this can be achieved
• Data transparency is a huge area, as mostly it is done on a volunteer level at the moment. More grants for data transparency work are needed
• TEEs is an underexplored area, because it is one of the most promising ways to get rid of the dependencies on relays that we have, but it needs more coordination around the research
• Shared standard and discourse around sidecars like mev-boost, commit-boost etc.

Conclusion

The PBSF has funded some important projects and has made a positive contribution to Ethereum research, but there is much more that we can do. Ultimately we need more proposals, and this means raising more awareness of the availability of funding for research from the PBSF, and also raising more awareness around what topics and areas we are seeking to fund.

The plan is to publish new RFPs, create more awareness about the research grants available, and ultimately to fund more research and infrastructure, in order to have a meaningful positive impact on Ethereum PBS research overall.

The round-table discussion that we held in Brussels was incredibly useful for gathering feedback and ideas from across the space. Based on this we have much to discuss and plan, and the next steps are the take the feedback we’ve gathered and put it into action, including things such as creating domain allocators, developing a tech tree and research dependency map, working on labeling and structuring guides, refining RFPs and more.

It is important however to point out that the PBSF is kept going by volunteers! Please get in touch if you think you feel like you would like to contribute, and help to share the info about the grants available to researchers!