Author: Antoine Riard 2023-06-30 03:46:32+00:00
Published on: 2023-06-30T03:46:32+00:00
In a recent discussion about the CivKit architecture, the concept of front-running in a peer-to-peer marketplace was brought up. Front-running refers to entering into a trade with advance knowledge of a transaction that will influence the price, in order to capitalize on the trade. In the context of CivKit, front-running could occur when a board discovers a batch of market offers and takes advantage of the opportunity before publishing the offer on its board.The discussion revolved around the roles of Mary the Maker, Terry the Taker, and Bob the bulletin board operator. Mary publishes a limit order to buy a derivative, and Bob, as the bulletin board operator, can choose to execute against Mary's order. If Bob decides not to execute, he relays the order to Terry, who has the option to execute the trade. If Terry also decides not to execute, Mary's order sits on the bulletin board.The concern raised was that this model resembles more of a brokerage rather than an exchange market structure. It was suggested that Terry should open his own brokerage and compete with Bob by quoting prices. By comparing metrics like execution quality, Bob and Terry can attract more market activity by providing better prices.Front-running was seen as a potential issue, but some participants noted that it is a good problem to have as it indicates active participants and liquidity in the market. The focus should be on finding what products people are interested in trading and providing a good user experience. Other security paradigms to mitigate front-running were discussed, including duplicating offers to multiple boards and monitoring latency anomalies, as well as running bulletin boards as federations with consensus rules.Overall, the CivKit architecture aims to provide a flexible framework for peer-to-peer marketplaces, allowing for different types of trades and adapting to the needs of market participants. The goal is to create a censorship-resistant and permissionless global trading system while addressing concerns such as front-running.The paper discussed in the context provides a detailed examination of the system architecture [3]. The authors express their gratitude to the peer reviewers for their contributions. They also mention their plans to release code and modules gradually, leveraging the Lightning Dev Kit [4] and Nostr libraries. These efforts will adhere to the established Bitcoin open-source and decentralized standards set by Bitcoin Core. The authors express their enthusiasm for collaborating with the community to standardize libraries and ensure interoperability between clients with a long-term perspective.The authors welcome feedback from the readers, encouraging an interactive dialogue. In conclusion, the context includes links to various resources. These include the paper itself [3], which delves into the architecture, as well as external references such as the Lightning Dev Kit [4] and the W3C DID Core specification [1]. Additionally, there is a link to the Privacy Pass project [2]. The authors provide a mailing list for further discussion and engagement with the Bitcoin development community [0].
Updated on: 2023-07-14T02:39:31.573973+00:00