Wallchain — — Uprooting from the Base, Reclaiming the MEV Rights Users Deserve 🛡️

Prelude

The recent discussions about the MEV (Miner Extractable Value) track are undoubtedly in full swing, especially projects related to minimizing MEV damage and redistributing MEV profits, which have garnered substantial attention. Setting aside Ethereum’s own PBS and various layer2 shared-sequencer solutions, and focusing purely on MEV projects, we’ve seen the continuous blossoming of established entities like Flashbots, which has introduced its own PBS solution SUAVE and services like MEV-SGX, coupled with MEV-Share for profit redistribution, becoming a killer in the Ethereum ecosystem that monopolizes the MEV upstream and downstream. Following that, we have Chainlink’s Fair Sequencing Service, a straightforward and easily understood solution, which, with its already extensive user base and simple integration, has also become a choice for many projects. Additionally, with the increasing number of private transaction pools like Taichi and bloXroute, along with a host of exchanges with inherent anti-MEV features, the entire track exhibits an extremely vigorous vitality.

Today, we’ll explore Wallchain, which also provides MEV-Recovery services. However, its approach diverges from other products, adopting a method that eradicates MEV at its source, primarily offering direct rebates to MEV victims. Now, let’s dive into this product together.

Viewing the MEV Process from a Regular User’s Perspective

Let’s take a transaction on Uniswap as an example and see where MEV occurs from a regular user’s perspective.

When we use MetaMask to trade on Uniswap, the process goes like this:

1. Selecting a Trade: On the Uniswap interface, you choose the tokens and the amount you want to swap.
2. Confirming the Trade: Once you click on actions like “Swap” or “Provide Liquidity”, Uniswap generates a transaction request.
3. MetaMask Popup Window: MetaMask pops up a window, displaying details of the transaction, such as transaction fees, Gas price, etc. You need to confirm these details.
4. Signing the Transaction: When you click “Confirm” in the MetaMask popup, you’re actually signing the transaction, not sending it immediately. This means you’re authorizing the transaction, but it hasn’t been broadcast to the network yet.
5. Broadcasting the Transaction: After signing, MetaMask broadcasts the transaction to the Ethereum network. At this point, the transaction is sent to the mempool (or transaction pool), waiting for miner confirmation.
6. Miners Select Transactions: Miners select transactions from the mempool to package, typically choosing those with higher Gas fees. Once a transaction is selected by a miner and added to a new block, it is confirmed.

Assuming everyone has a basic understanding of the fundamental concepts of MEV (such as searcher, miner, types of MEV, and principles discussed in the previous 101), we know that MEV mainly occurs after transactions are broadcast to the mempool. Since everyone can see the transactions in the mempool, if someone finds a transaction profitable, for instance, it can be sandwiched or arbitrated.

Simultaneously, we also need to understand that in the distribution of types of MEV, sandwiching occurs most frequently on Ethereum . According to data from eigenphi, in the last 30 days, 72% of MEV transactions were sandwiches, occurring at an extremely high frequency. Moreover, most MEV occurs in DEXes. After all, sandwiches mainly target “transactions”.

Knowing these two points, we can naturally think: since DEXes are the main venues where MEV occurs, can we target DEXes to reduce the occurrence of malicious MEV like sandwiches and solve the LP Profitability Problem? And since MEV only occurs after being on-chain, can we resolve this issue before being on-chain? Coincidentally, that’s exactly how Wallchain solves the problem.

Wallchain Strategy: Pulling the Rug, Keeping It Simple

Principles and Workflow

Before diving into the nitty-gritty of Wallchain’s principles, let’s get a quick rundown of what Wallchain is all about. In a nutshell, it’s the go-to MEV-Recovery solution for EVM chains, aiming to redirect funds that would otherwise go to bots, back to the users(e.g. Trader, LPs, even protocols: ). To achieve this, its main product isn’t directly user-oriented but integrates with DEXs, redistributing MEV profits to both DEXs and users, thereby mitigating the impact of malicious MEV like sandwich attacks and redistributing value coming from arbitrage and LVR.

Here’s a breakdown of its main workflow, aka Meta-intent Flow Auction:

https://news.wallchain.xyz/p/meta-intents

1. Before the transaction is submitted to the mempool, its raw CallData is sent to the Meta-Intent Auction Service.
2. Searchers participate in the auction process and the highest validated bid is selected for execution.
3. On the client side, a new transaction is created. It has the original user transaction CallData and searcher CallData. Unlike other OFAs, the bundling of CallDatas happens inside a single transaction, which helps to abstract out the execution infrastructure.
4. User CallData gets executed.
5. Finally, the searcher CallData is executed. MEV is captured and redistributed

So, here is a clear benefit emerge from this approach:

• On top of MEV supply chain,100% MEV Win Rate: Meta-Intents operate at the application level to help users and protocols construct the right transactions before they’re signed.
• No dependency on specific private nodes, and no additional RPC required for users：It reduces the need for custom RPCs, as the Meta-Intent Auction itself formulates the appropriate function calls to capture leaked MEV. Meta-Intents extract the MEV before any OFA, RPCs, sequencers, validators etc.

These advantages translate directly into:

• Robust value capture capability. Since value capture occurs before on-chain action, 100% of the transaction profit can be captured. In the future, when handling large-scale transactions becomes unmanageable, the captured arbitrage space can be sold to downstream projects, offering strong vertical scalability.
• Higher rebates for users. Without other searchers involved, the rebate given to users is extremely high and is settled in the token of the user’s transaction/USDC, not through its own tokens, preserving maximum value for users. This is much more attractive to users than other products that do not capture arbitrage value off-chain.
• Unparalleled scalability. Users interact with Wallchain not by sending transactions to private pools like flashbots and bloXroute but through off-chain API interactions, with Wallchain deciding where to send your transaction in the end. This means it can extend to all EVM chains and layer2s, and even non-EVM chains by modifying Wallchain router and Master.

Relevant Data

Wallchain’s current business mainly integrates with DEXs on Polygon and BSC, such as QuickSwap and PancakeSwap, protecting transactions up to $1.5B per month, safeguarding over 23k transactions, and shielding over 10k addresses from malicious MEV attacks.

https://news.wallchain.xyz/p/meta-intents

Another line of business is a B2C solution for active token traders that leverages MEV to give traders an additional edge in speed and security. This is currently running in beta with selected users. If you’re interested to take part, you can DM Kyparus (https://twitter.com/kyparus)

Wallchain doc

A Pinduoduo-like Product Approach

Beyond the product, Wallchain’s business model approach is worth analyzing separately. The famous S2B2C business model proposed by Zeng Ming has been widely discussed and regarded by many as a model. However, Pinduoduo, taking a different route with its C2S2B, managed to carve out its piece of the cake from Taobao and JD.com, becoming an unignorable giant today. C2S2B, or Consumer-to-Supplier-to-Business, involves consumers first stating their needs, suppliers then producing products based on these needs, and finally, businesses selling them. Characteristics include:

• Consumer demand leads production.
• Suppliers produce products directly based on consumer demand.
• The business acts as a platform, connecting consumers and suppliers.
• This model can reduce inventory risk as products are produced based on actual demand.

Pinduoduo, through group purchases, allows consumers to band together and collaborate directly with suppliers or manufacturers, thereby reducing costs and minimizing their inventory risk. Does this ring a bell for those of us in Web3? Isn’t this similar to the Intent-centric model recently proposed by Paradigm: “Tell me what you want, what you’re willing to pay, and I’ll handle the rest.”

How does this relate to Wallchain? Recall the Wallchain to C plugin mentioned above. Why did they launch this plugin? Isn’t their existing to `B DEX integrated product already capturing a large number of arbitrage transactions and generating substantial revenue? The reason lies in its main product feature — excellent scalability.

• While to B products are good, large-scale application still requires products willing to integrate the Wallchain SDK, involving various market and bizDev strategies, and marginal costs may not decrease quickly.
• However, this toC product is different. It doesn’t require users to modify RPC or use a specific DEX on a specific chain to complete transactions. Instead, it adopts a plugin format familiar to community users, uses a user-friendly UI to let users see what they get, and allows viral spread after users get a taste of the benefits. Thus, it captures a large number of transactions that can be arbitraged from the source, controls the traffic entrance, and can distribute these transactions to other MEV projects on the chain, reducing its execution costs and using existing MEV infrastructure for faster expansion. This is a C2S2B approach similar to Pinduoduo, where it can act as both S and B or purely as S, distributing arbitrage orders to MEV products like private transactions. So, although they consider themselves competitors with flashbots and bloXroute, they are not in the same supply chain position and are not in a purely competitive relationship.
• By combining toB + toC product matrices, an intent-centric metapool is eventually formed. In the future, auction-like mechanisms can be used to distribute & execute orders according to user intentions, holding the corresponding bargaining power and forming a multi-source sustainable system. In addition, the Wallchain team seems to have a very accurate grasp of the psychological characteristics of ordinary users: Let me suddenly use a third-party plugin related to transactions. What if there is a backdoor? Who do I talk to? So they chose to break through from the B-end, integrate services to the head DEX of Polygon and BSC, invisibly let these head DEX endorse their brand, and then launch this toC plugin, which is more easily accepted; conversely, as their plugin is accepted The higher the degree, the more willing other dexes are to integrate the walllchain SDK. After all, the more people use it, the higher the security in people’s minds :). And starting from BSC and Polygon instead of competing directly with Ethereum and flashbot, the strategy of accumulating grain and slowly becoming king is much more economical and efficient than other methods.

Competitors or Partners

Although I personally do not consider Flashbot and bloXroute to be direct competitors of Wallchain, since the official statement says so, we need to take a brief look at what products in these two projects might compete with Wallchain and what their characteristics are. Of course, regarding competitors, I personally prefer to compare Wallchain with KeeperDAO. Their competitive relationship might be much larger than that with Flashbot, but since KeeperDAO is no longer continuing with this project and has disbanded the community, we will not compare it here. However, it should be noted that there are already many articles explaining the Flashbot product matrix and several other projects on the market. We will not elaborate on these projects here (we might issue a separate article to sort out these products later), but just briefly mention their principles and characteristics, and what are the pros and cons compared to Wallchain.

Flashbot — — MEV-Share

Since Flashbot’s product matrix is very complex, basically covering the upstream, midstream, and downstream of conventional MEV, we should analyze a specific product of Flashbot that might compete with Wallchain. If you have read the documentation of Flashbot, you will find that, similar to Wallchain, the product that returns MEV arbitrage income to users is MEV-Share, which was launched in February 2023.

As the name implies, MEV-Share allows users to selectively share transaction data with Searcher, allowing users to decide when and in what form their orders are executed by whom, and finally get a share of the profits from Searcher. It is not a completely independent product but is included in Flashbot protect RPC. Therefore, its disadvantages and characteristics are very obvious:

• You need to modify the RPC in your wallet or send transactions through the MEV-Share Node API. This is almost no threshold for old users, but for newcomers, modifying RPC is a headache.
• Moreover, even if ordinary users have added Flashbot protect RPC, they still cannot accurately know how much rebate they can get.
• In addition, most of Flashbot’s products only support Ethereum. If you want to use its services on other chains like BSC, modifying RPC is inevitable.

Of course, its advantages are also very obvious.

• First of all, it is backed by Flashbot, the MEV giant in the Ethereum ecosystem, and the adoption rate of various products is basically the highest in the entire ecosystem. Especially mev-boost, 90%+ of the nodes use this service, and you can get the highest profit transaction sorting without choosing a transaction.
• Reliable technical support, extremely strong community R&D capabilities, and well-known reputation. This makes Flashbot’s product promotion cost relatively low compared to other projects, and many project parties and institutions are willing to use their products instead of the more niche Wallchain.

https://mevboost.pics/

bloXroute, BackRunMe

The name bloXroute might sound unfamiliar at first. Indeed, compared to Flashbot, it has fewer opportunities to directly interact with the public. Like Flashbot, it also has a complex product matrix, including gateways, APIs that can access on-chain transaction information without nodes, subscription data streams, and other services. But unlike Flashbot, which relies on its own MEV-boost, bloXroute relies on its own high-performance blockchain distribution network (BDN, actually a high-capacity, low-latency relay network, which can provide fast relay services in different regions according to user location), supporting fast propagation of transactions on multiple chains (8% of blocks are mined within 1 second), thereby bringing new possibilities to various users. This includes BackRunMe, which has a mechanism similar to MEV-Share.

BackRunMe allows users to submit private transactions (which will not be broadcast to the public mempool, thus achieving the purpose of preventing malicious MEV). Then Searcher can obtain transaction information, carry out arbitrage, and finally, BackRunMe will return part of the profits generated by MEV to users. The whole process is as follows:

bloXroute Doc

Of course, if users want to use BackRunMe, one way is to enter bloXroute’s official frontend https://backrunme.com/swap to trade (integrated with Uniswap V2 and Sushiswap), and the other is like Flashbot, you need to add RPC to your own wallet.

bloxroute

Because the overall idea is similar to Flashbot’s MEV-Share, the disadvantages are also similar to MEV-Share. As for the frontend page that blockXroute can use directly? Please regard this as a mere “demo” that simply shows you the effect. However, blockXroute’s advantages are also very clear:

• In addition to various fancy APIs and data services, its biggest feature is extremely fast broadcasting speed, with an average time of only about 1 second. Completely relying on itself, compared to wallchain (which needs to rely on other rpc to broadcast transactions), it is an order of magnitude faster, which is crucial for some arbitrageurs and traders.

bloxRoute

Other DEXs with Built-in Anti-MEV

Now many DEXs with built-in anti-MEV have appeared on the market, but each one plays differently, and there is no standard service like the aforementioned projects. A few classic schemes are as follows:

• The earlier Mooniswap uses a virtual quantity method, which separates transactions in different directions in the same pool (for example, one supports A/B, the initial quantity is 10:10, but when accounting within the pool, A exchanges B and B exchanges A are two account books (initially both are 10:10), transactions in different directions update different account books, so that arbitrageurs cannot arbitrage at all.), making front-running/sandwich attackers unable to profit, and can only accumulate money into the corresponding transaction pool, achieving a damage of 1000 to the enemy and 800 to oneself :)
• The currently famous Cowswap. It uses a batch auction order form, integrates various DEX aggregators, and provides traders with the best price. When two traders each hold assets that the other wants to trade, orders can be settled directly between them without external market makers or LPs. And it supports users to customize order parameters, including quantity and price, and leave the rest to the solver responsible for allocating transactions. This way is very similar to the stage that wallchain wants to reach, but it is aimed at cowswap itself or DEX that has integrated the corresponding service, and does not have the to C plugin that wallchain has almost no requirements.
• There are other anti-MEV measures such as adding time locks and using DAG, and we will not list them one by one. But without exception, none of them have the scalability of wallchain, which has almost no requirements. So, in general, compared to these “opponents” (possibly friends in the future), the biggest feature of Wallchain is
• Due to the complete non-interaction with RPC, it brings unparalleled scalability at present. Whether it is an EVM chain, whether it is layer2 or sidechain, or even if the project party does not integrate my service, I can still capture the MEV opportunities in various ecosystems. In comparison, the scalability of other similar products is inferior, either requiring RPC modification or can only be used in specific ecosystems or applications.

Conclusion

Contrasting with the S2B2C approach of Flashbot and blockXroute, which involves crafting a product before seeking users, Wallchain ingeniously employs a reverse C2S2B strategy in product development, aligning it perfectly with the current trend of “intent-centered” products. Simultaneously, the team is well-aware of where to initiate, how to iterate through the product matrix, demonstrating a crystal-clear strategy. However, whether it can become the Pinduoduo of the MEV track is something we will have to wait and see.

Reference:

• Wallchain doc
• https://docs.wallchain.xyz/
• Introducing Meta-Intent Flow Auction: Launching with PancakeSwap
• https://news.wallchain.xyz/p/meta-intents
• Flashbots doc
• https://docs.flashbots.net/
• BloXroute doc
• https://docs.bloxroute.com/
• MEV — A Deep Dive, Part 1:
• https://medium.com/@liamzhang/mev-a-deep-dive-part-1-3f389ef16d32
• MEV 101: A Glimpse into MEV, The Magic of Manipulating Time
• https://lbanklabs.medium.com/mev-101-a-glimpse-into-mev-the-magic-of-manipulating-time-4ded801647f8

Disclaimer: This article is provided for informational purposes only and should not be considered as financial advice. The cryptocurrency market is highly volatile and unpredictable. Always conduct thorough your own research and consult with a qualified financial professional before making any investment decisions.