Published on: 2022-05-21T15:37:51+00:00
In a recent discussion on the Bitcoin-dev mailing list, concerns were raised about MEV (Maximal Extractable Value) and its association with general covenants. MEV refers to miners analyzing contract execution to order transactions in a way that maximizes their profit. One proposed solution to address MEV is to ensure all transactions in a block occur simultaneously by limiting price oracles to report only one price per block. However, this would require a new signature opcode.ZmnSCPxj discusses the vulnerability of covenant mechanisms to MEV, specifically mentioning the `OP_CSFS` and `OP_CAT` mechanisms. These mechanisms require copying parts of the transaction into the witness data for covenants, with `OP_CSFS` needing large scripts if used for covenants. ZmnSCPxj suggests creating an opcode explicitly supporting recursion to better support recursive covenants and reduce the amount of data pushed on the witness stack.MEV poses a problem for complex smart contracts, as miners can manipulate transaction order for their own profit. Privacy mechanisms like Taproot, which reveal only one branch at a time, are proposed as a solution. Covenant mechanisms requiring large witness data are more vulnerable to MEV, as miners may prefer branches with smaller witnesses. To prevent this, burdening the disputant considered "wrong" with the larger witness is suggested.The recent CTV meeting addressed topics such as OP_TX, OP_CAT/CSFS/General Covenants, and Script Interpreter Flags. The discussion included evaluating CTV/NOP upgradability versus multibyte op-success and considering the use of OP_TX for CTV. Concerns about general covenants were discussed, with some users expressing fears of censorship and imposition of covenants without consent. MEV was also mentioned as an issue associated with general covenants, similar to Ethereum's MEV.The meeting concluded with thoughts on documenting the rules enforced by flags, re-evaluating the test flags infrastructure, and considering script enforcement in light of taproot implementation. Overall, the discussion highlighted the need to address MEV and vulnerabilities in covenant mechanisms while ensuring privacy and consensus stability.
Updated on: 2023-08-02T06:37:12.834569+00:00