Flashbots Eth2 Working Group Sponsorship

Flashbots started an Eth2 working group last week. Chainflow plans to sponsor 1 or 2 validators (individual or small entities) to represent smaller, independent and self-funded Eth2 validator operators.

Here's why.

The working group's stated goal is to -

...represent all eth2 stakeholders. This includes (but is not limited to)  solo stakers, decentralized staking pools, staking providers,  infrastructure providers, exchanges, custodians, and others.

This is fantastic goal and sounds like a well-balanced group of validator operator types. Yet reviewing the original list of members (found here), there's some work required to achieve this vision.

The need for balance

The list of current members is a who's-who of the largest validator operating companies and large validator infrastructure providers. Most of the members already control large, centralizing stakes in the networks they validate on.

Infrastructure providers serve as a particularly strong centralization vector. For example, when Blockdaemon announced their participation, they highlight running "over 12,000 active Eth2 validators". They go on to call themselves "one of the world's largest Eth2 operators".

Well, that's wonderful if you're a big profit-driven company that needs big returns to satisfy big investors. Yet that's not so great for an Ethereum project, as decentralization is one of the Ethereum community's core values.

Bison Trails, in their Q&A, encourages companies and entities to apply to become members. They then suggest "small-scale or enthusiast validators" to "join the ETHStaker community to receive the benefits of Working Group membership."

This feels more than a little elitist and paternalistic to me.

Not to mention it conflicts with the working group's stated goal. And this comes from a participant who helped recruit the original members, which was done in a behind-the-scenes process.

Why are we doing this (and why doesn't Chainflow apply to join)?

It's for these reasons more representation from smaller, independent and self-funded validator operators is urgently needed. This participation is required so that the big interests don't, knowingly or unknowingly, cause Flashbots for Eth2 to be designed in way that compounds staking's rich get richer problem.

This problem already disproportionately benefits these large companies. Allowing them to benefit disproportionately from MEV extraction as well goes against the core mission of Flashbots, at least as I understand it.

Originally, I expressed interest in joining the group. However, Chainflow doesn't currently operate Eth2 validators. While we've been following the work as long as anyone (4+ years), we've been waiting for a way to meaningfully contribute to Eth2 staking, without adding to the centralization problem.

Operating validators for Rocket Pool is one activity we've considered. Another would be participation in this working group. If we did participate, we'd bring Eth2 validator infrastructure online to both testnets and mainnet.

Before doing this, I thought it made more sense to sponsor existing Eth2 validators to participate. Having bootstrapped and self-funded Chainflow from the outset and taken no outstide investment, I'm well-aware that smaller operators are strapped for time and resources.

(This is also why the large validator operators in infrastructure providers disproportionately dominate these discussions.)

The idea is that Chainflow will subsidize the time and attention smaller operators will spend participating in the Flashbots Eth2 working group. The details will depend on a specific operator's situation.

We're happy to be flexible in what the subsidy and sponsorship looks like. I'd be available to participate in the working group alongside you as well, if that would be of benefit. To clarify, my participation would be optional, not a mandatory condition of the sponsorship.

So if you're a smaller, independent and self-funded Eth2 validator operator, who cares deeply about decentralization (really) and wants to advocate for others like you, please get in touch.

We hope to hear from you!

#KeepStakeDecentralized 💪

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