From its inception, the founders of the Solana network envisioned a decentralized, speedy and scalable applications platform. The network’s developers sought unique solutions to problems that cropped up on other protocols, particularly contrasting their strategies against the dominant competitor, Ethereum.
Even though the two systems are different from each other, they both face one major challenge: MEV. It’s the unrelenting effort by certain participants to extract wealth — the “Maximum Extractable Value” — from the network’s activity in a manner that can be detrimental to users.
MEV activity on Ethereum has been a fast and furious battle for some time, with solutions to combat harmful exploitation, like Flashbots, arising in response. While Solana can proudly claim to have averted several MEV issues via its design, it has struggled to avoid at least one crucial problem: spam.
Co-founder of Jito Labs, Lucas Bruder and co-founder of Ellipsis Labs, Eugene Chen spoke to Blockworks on the Bell Curve podcast about their efforts to mitigate Solana’s spam problem.
Following the MEV timeline, Solana is at a more primitive stage than Ethereum, Chen says. Most validators on Solana are benevolent in practice whereas the Ethereum MEV environment can be pretty ruthless, “which is kind of a luxury, but not something that we can depend on forever.”
“MEV on Solana today is quite similar to what it looked like on Ethereum in 2019 or early 2020, pre-Flashbots, when MEV was just starting to become a problem,” Chen observes.
He believes that Solana developers today have a huge advantage, as they can learn from the “ton of fundamental MEV research” that’s already taken place in Ethereum’s development.
The statistics don’t lie
Bruder illustrates the spam problem with a few statistics, noting that in recent observations, 60% of computing power was spent on arbitrages — rapidly repeated trade orders hammering the network in an effort to push through profitable transactions.
“And there is a 98% failure rate. So, you know, 98% of arbitrage transactions are failing on Solana.” This strategy wouldn’t be feasible on Ethereum due to gas costs but on Solana, more than half of all “compute units” are spent executing failed transactions, Bruder says.
“Right now, the best way to land a transaction is spamming,” he says.
“It’s like a hundredth of a penny to send a trade, not including priority fees, if you attach those. So it’s super cheap to do it.”
Part of the challenge is that, unlike Ethereum, Solana does not use discrete time windows. Instead, it’s a continuous flow of transactions. The Jito-Solana client addresses the spam problem by introducing a Flashbots-like bundle mechanism where transactions sit in a “pseudo-mempool” for roughly 200 milliseconds. Searchers can then bid for priority to be sent to validators.
Slowing down time
“What you’re doing,” Flashbots strategy lead Hasu comments, “is you’re actually slowing down time.”
“You’re turning it from continuous time into discrete time. So there’s actually a waiting period for transactions to accumulate.”
Bruder adds that “packets essentially flow through a relay that any validator can run,” so it can’t censor transactions through any sort of centralized preferential treatment.
“Basically, it’s like an all-or-nothing commit sequence similar to Flashbots,” he says.
“We modified the validator,” Bruder says, “so that it knows how to process a bundle in this multi-threaded context and it will execute it atomically.”
Bruder notes this offers “a very strong selling point for searchers that are kind of just spamming and crossing their fingers that it will land.”
The bundle is prioritized via “a special transaction pipeline” that is less congested, offering stronger ordering guarantees, skipping the buffer, and executing as quickly as possible as soon as the auction is over.
“The main thing,” Bruder says, “is that you offer a better ordering guarantee and the chance to skip the pipeline.”
Adoption is growing
“We’ll probably see something similar to Flashbots where if someone has alpha, they’ll probably just go through the normal channel,” Bruder concedes. But when activity starts being contested, it may become a sort of “fee war,” at which point participants can “start to extract things more efficiently using bundles.”
While Bruder admits it’s been difficult to get things started, adoption for the Jito solution is increasing. “We’re seeing a lot of bundles landing today.”
“We’re currently at 24% of Solana stake running the client and there’s 115 validators running the client.” Anyone from “super small validators” to “staking facilities” are using the client — it’s “a wide range,” he notes.
Hasu, impressed by the numbers, remarks, “when you said that you have 24% of stake adopted, I thought you would say more like two percent, because you previously said it’s been very hard.”
“But I mean, 24% is really impressive, right?”
“The first 20% is super hard,” Hasu says encouragingly, “and then the next 80% is probably gonna be very easy for you guys.”
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Source: https://blockworks.co/news/solana-spam-problem