ETHCC Insights: Automated Market Makers, Cross-chain Infrastructure, and Market Fundamentals…
TechFlow Selected TechFlow Selected
ETHCC Insights: Automated Market Makers, Cross-chain Infrastructure, and Market Fundamentals…
magic shared insights on AMM, pre-confirmations/commitments, and ETHCC.
Navigating Web3 tides with focused insightsAuthor: @magicdhz
Translation: Baicai Blockchain
ETHCC (Ethereum Community Conference) is an annual flagship event for the Ethereum community, bringing together developers, researchers, entrepreneurs, investors, and blockchain enthusiasts from around the world to discuss and exchange insights on the latest technological advances, use cases, and industry trends. ETHCC 2024 took place in Brussels, showcasing numerous real-world applications, hosting over 500 side events, and highlighting the convergence of blockchain and artificial intelligence.
Below are some informal thoughts shared by @magicdhz regarding AMMs (Automated Market Makers), pre-confirmations/promises, and foundational aspects of ETHCC:
1. Bullish on AMMs
I’ve solidified my extremely bullish stance on AMMs. They are the only DeFi applications building entirely new games and incentives atop the existing traditional financial market structure. For all LOB (limit order book) enthusiasts, traditional finance is your ceiling—AMMs elevate finance to a whole new level and benefit from all the additional properties of blockchain.
2. Infrastructure centered around cross-chain intent is evolving
Infrastructure centered around cross-chain intent (or whatever you want to call it) is quietly gaining momentum behind the scenes, with solver networks becoming increasingly sophisticated. The transaction supply chain is shifting off-chain and/or paying for Ethereum’s security. In my view, cross-chain intent-centric infrastructure + solver networks + a rollup-centric future will ultimately lead to AMMs building their own chains.
3. On Ethereum
There are efforts underway to decentralize the builder market on Ethereum. Although we don’t yet know what additional value promise games might unlock (e.g., futures in block space), I still can’t envision a final state reverting back to MEV-boost-style dynamics—essentially “build me the most valuable block.” There’s potential to explore concepts like impermanent loss or commitments as mechanisms for unlocking additional value.
Why would stake always eventually concentrate among validators who say “commit to or include transactions that build me the most valuable block”? If you have any thoughts or answers, feel free to comment.
Unfortunately, I missed much of the content around Flashbots’ new Rust-based builder and didn't engage deeply in discussions related to TEEs (Trusted Execution Environments). I think there’s more to unpack here, as they’re tackling fundamental issues—specifically, control over information flow (which I believe is the core theme).
4. On MEV
Despite extensive discussions about more infrastructure and MEV games, little attention has been paid to fundamentals. On-chain spreads are wide, meaning the set of possible solver paths—and thus MEV—is smaller than it could be if spreads were tighter, or constrained by a lack of fundamental asset backing. Ultimately, this comes down to who provides liquidity and why.
I believe there’s massive opportunity in building fundamentals. To me, this means protocols and their DAOs aligning on business models that drive revenue and value, and/or return liquidity to their governance tokens. (This is where I’ll be focusing. Specifically, I’m interested in working with DAOs to identify their revenue drivers and provide relevant economic analysis—with the goal of delivering valuable insights for governance.)
5. Bullish on pre-confirmations
I’m bullish on pre-confirmations, though the market generally views them pessimistically. Adding more complexity and trust to the base layer is a roundabout way of reducing block times or adopting new consensus mechanisms. That said, I’m bullish on rollup sequencers and other off-protocol infrastructures (like Primev or Espresso) because they can offer users pre-confirmations (always beneficial for user experience) without increasing base-layer complexity.
Overall, the trend of moving execution off-chain is already evident. I’m not sure how this will evolve. Random thought: any updates on discussions around base-layer consensus? And Ethereum’s tendency to become the most secure decentralized autonomous organization?
6. Summary
In summary, although Ethereum feels highly decentralized (because I spent all my time at side events, where the content was more valuable), there are still too many brilliant people building on Ethereum to ignore.
That said, if I were a trader, I’d feel that explosive growth has already passed. There are some very interesting projects that just raised funds, and Solana continues to be an attractive environment for applying the lessons we’ve learned on Ethereum. Both offer new grounds for application development and seem to present better growth opportunities. This doesn’t mean ETH won’t still benefit from ETF inflows, but I’m unsure how strong a long-term signal that is compared to the core problems that still need solving.
Additionally, I believe rollups will become extremely attractive as sequencers unleash the MEV (Maximal Extractable Value) beast. Time acceleration is bullish—the performance will depend on the DAO’s ability to scale its ecosystem and return value to the protocol.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
@magicdhz
