What is Taiyi?
An introduction to Taiyi, Luban’s solution for Ethereum L1 preconfirmation
Taiyi (太一) is Luban’s solution for Ethereum L1 preconfirmation. As developers deeply invested in the Ethereum ecosystem, we’ve identified critical user experience bottlenecks that hinder Ethereum Mainnet’s usability:
- Long Transaction Confirmation Times (~12 seconds): Users face delays as they wait for their transactions to be included in the next block.
- Non-Deterministic Transaction Fees: Fluctuating gas prices make it challenging to predict transaction costs accurately.
What Taiyi Means for Different Stakeholders
👤 For Users
- Shorter Confirmation Times: Transactions are confirmed rapidly without the need to wait for the 12-second block interval.
- Deterministic Transaction Costs: Users know the exact fees upfront, eliminating uncertainty and enabling better financial planning.
⛏️ For Validators
- Enhanced Yield Opportunities: Earn additional income through preconfirmation tips, maximizing the revenue from validating transactions.
🦄 For Applications
- Wholesale Blockspace Settlement: Access to blockspace with long-term commitments at fixed fees, allowing for more predictable operational costs.
- Flexible Pricing Schemes: With a fixed cost basis, applications can offer more adaptable and competitive pricing models to their end-users.
🧻 For Based Rollups
- Bootstrap Validators Easily: Leverage Taiyi’s opt-in validator set to quickly establish a validator network with minimal changes required.
Taiyi Problem - Solution Mapping
Problems
1. Long Confirmation Times
1. Long Confirmation Times
The current PBS model in Ethereum necessitates a just-in-time competition among block builders for each block. This auction process, lasting approximately 12 seconds, introduces significant latency in transaction confirmations, degrading user experience and limiting Ethereum’s potential for high-frequency applications.
2. Volatile Gas Fees and Lack of Hedging Solutions
2. Volatile Gas Fees and Lack of Hedging Solutions
The key issue in Ethereum’s gas fee market is the absence of effective hedging solutions, primarily due to the lack of natural sellers for future blockspace. Without the ability to hedge against these fluctuations, users and applications face significant uncertainty in transaction costs, and the ecosystem lacks the sophisticated financial instruments necessary for a mature and stable market.
3. Opaque Price Discovery Mechanisms
3. Opaque Price Discovery Mechanisms
Block builders, by maintaining private order flows, circumvent true price discovery for blockspace within individual blocks. This opacity in pricing mechanisms leads to market inefficiencies and potentially unfair advantages for certain participants.
4. Centralization of Block Building
4. Centralization of Block Building
As of October 2024, the top two block builders are responsible for constructing over 95% of blocks. This concentration of power significantly undermines Ethereum’s fundamental value proposition of censorship resistance and decentralization.
5. Cold Start Problem for Based Rollups
5. Cold Start Problem for Based Rollups
Bootstrapping new validator set for based rollups presents a significant challenge. The process of bootstrapping a new network of validators is time-consuming and resource-intensive. This “cold start” problem can be a major hurdle for new based rollups, slowing down their launch.
Solutions
1. Optimizing L1 Confirmation Times
1. Optimizing L1 Confirmation Times
Taiyi significantly reduces confirmation times by introducing a preconfirmation mechanism. This allows transactions to be confirmed before they are included in a block, effectively eliminating the 12-second block time delay. Users can receive near-instant transaction confirmations, drastically improving the Layer 1 experience and enabling high-frequency applications directly on Ethereum’s base layer.
2. Natural Hedging Solutions for Blockspace
2. Natural Hedging Solutions for Blockspace
Taiyi leverages validators, the natural producers of blockspace, to create a robust marketplace for future blockspace. This paradigm shift introduces a perfect natural hedge against gas fee volatility, addressing a critical pain point for users and applications. By enabling validators to sell their future blockspace directly, Taiyi creates a win-win scenario: users gain access to predictable transaction costs and effective hedging instruments, while validators unlock new revenue streams, enhancing their economic incentives within the Ethereum ecosystem.
3. Transparent and Efficient Blockspace Price Discovery
3. Transparent and Efficient Blockspace Price Discovery
Taiyi introduces a fungible preconfirmation for blockspace trading, enabling price discovery to occur in a permissionless and open market. This allows for the trading of both absolute positioning (e.g., top of block) and relative positioning (e.g., an arbitrage after a swap transaction) of blockspace between dynamic buyers and sellers. By facilitating this open trading environment, Taiyi promotes transparent price discovery and enhances censorship resistance properties, addressing the opacity issues present in current blockspace markets.
4. Enhancing Censorship Resistance
4. Enhancing Censorship Resistance
Taiyi significantly improves Ethereum’s censorship resistance by decentralizing the block production process. Unlike the current system where a single block builder dominates, Taiyi enables free trading and exchange of blockspace among multiple dynamic parties. This decentralization increases the cost and difficulty of censorship.
5. Reusable Validator Set For Based Rollups
5. Reusable Validator Set For Based Rollups
Taiyi solves the cold start problem for based rollups by providing a reusable validator set. This allows new rollups to leverage Taiyi’s existing network of validators, significantly reducing deployment time and costs. Built-in delegation mechanism allows validators to delegate L2 block building to “superbuilders” from day 1, significantly the time needed to provide optimal UX.