Lei Yang

Sorry, on Ethereum layer one.

But I think what it fundamentally breaks for us is because our block interval is so small, because in our case, the blocking interval is 10 milliseconds at the mini block level.

It's not constructive to imagine that

people can run auctions at such latency because, say, I'm a trader in New York and the sequencer is, literally is, in Tokyo, then it takes me about 60, almost, I think, 100 milliseconds to even have my, like, intention of how much I want to pay for this block transmitted to the Tokyo sequencer.

So, like, running auctions at this kind of fine granularity completely breaks down.

What we are trying to achieve, what we're trying to do here, I think we call it the proximity market, is instead of microscopic options where you have to dynamically pick your ordering preference every block, you do it on a much coarser granularity, like every month or every week, every quarter or so.

So you run those options at this kind of interval and decide a bunch of people that will have the seat to co-locate with the sequencer.

And once you do that, then they can take whatever algorithm they want to run and run them on these seats, which are basically virtual machines that are right next to the sequencer.

So the quotes we get from our cloud provider is down to one millisecond.

And if people want to optimize, they can even get down to 100 or even tens of microseconds, which I think is...

right there with NASDAQ level high-frequency trading.

Yeah, so this is kind of how we want to like collect quote-unquote MEV, but also I think for us to collect part of the MEV, we really want to redistribute it to the community.

We really want to reinvest in the ecosystem, but that's kind of a topic that Namik should highlight.

But I think just on the technical design,

Our goal is to have just kind of semi-long-term auctions every week, every month to decide who can co-locate with the sequencer.

And also it helps incentivizing people to move next to the sequencer because the reason for you to have a 10 millisecond block interval is for you to build efficient, liquid markets, right?

What's the need of, what's the purpose of 10 millisecond block interval if people are, if those really high-fidelity traders which are

Really, the people who are responsible for market liquidity are going to stay at the opposite side of the world and just remotely market make, right?

They should come to the sequencer.

So this, I think, is both an incentive structure and also, I think, a more practical way for us to have efficient markets