'Security' is the top priority; sacrificing security for efficiency may ultimately lead to a total loss.
Written by: Haotian
In recent days, there has been heated discussion around the Trading Bot rug incident. Many people are puzzled as to why this popular on-chain PVP phenomenon relies on a centralized custody method that seems to insult intelligence at first glance.
The question arises: how should high-performance chains address the conflict between high-frequency trading matching demands and decentralization? Could @UTONIC_uTON's AVS + MPC security enhancement service be a tradeoff solution?
1) Although users have been wary of centralization for a long time, with the rise of high-performance trading chains, AI Agents, and MEME on-chain PVP trends, a bot execution trading paradigm that prioritizes performance has desensitized this concern. Regardless of the security of Trading Bots, any platform that successfully buys or sells during FOMO sentiment will receive accolades.
However, after the Dexx incident, it is likely that many people will put 'security' as the top priority, as sacrificing security for efficiency may ultimately lead to a total loss.
2) So, why do high-performance public chains like @solana and @ton_blockchain still engage in centralized matching trades, and why do Trading Bots sacrifice decentralization for efficiency?
In simple terms: since chains like Ton and Solana are inherently focused on high-performance matching, interactions between users and chain server nodes can easily fail during peak times due to transaction congestion, leading to a poor experience.
Trading Bots effectively engage in off-chain pre-packaging and matching, which are finally confirmed collectively on-chain. As a result, the perceived latency speed for ordinary users can reach millisecond levels, while also reducing the possibility of orders being subjected to MEV once they enter the Mempool.
The downside is that this kind of preprocessing matching requires a centralized account batch packaging design, initiated by a single entity to aggregate on-chain transactions, thereby avoiding the independent on-chain behavior of dispersed users. Therefore, it relies on a somewhat centralized asset custody method.
3) This bears some resemblance to the Pre-Confirmation mechanism being explored in the Ethereum ecosystem. The core logic is to add as many preprocessing matching steps as possible before transactions go on-chain. Therefore, there exists a tradeoff method that can simultaneously ensure decentralized security verification and high-performance efficiency.
In the following text, Utonic shares a Restaking-based AVS security consensus enhancement model + MPC multi-signature shard private key management approach to explore decentralized custody solutions for Trading Bots. I will follow this line of thought for analysis:
1. MPC is a multi-signature encrypted asset custody solution, where users, Bot platform parties, and Utonic AVS verifiers each control a portion of the private key shards. If the signature threshold is set to 2/3, real-time trading is completed collaboratively by the Bot server and the user, while sensitive aspects of withdrawing special assets are handled by the AVS verification network and the user.
This is essentially a layered management of asset application scenarios, granting the Bot platform more permissions during instantaneous high-frequency trading, while giving the AVS platform more permissions when it affects asset security.
2. The Ton public chain adopts a Workchain sharding architecture design, which naturally supports a multi-chain structure, and as an application-specific chain serving applications, it must consider the complexities of real-world app deployment scenarios in its verification mechanism.
The AVS mechanism appearing in the Ton ecosystem is quite similar to the @eigenlayerAVS mechanism in the Ethereum ecosystem, both providing a security consensus layer to broader specific application scenarios in a more flexible security output manner. Ton's flexible verification rules and shard scalability will reduce the time consumed by this layer of consensus, meeting the needs of Trading Bots for high-frequency matching trades.
3. The emergence of MPC alone gives the impression of centralization in the control of private keys by a multi-signature governance committee, but the AVS network is a decentralized distribution model secured by a Restaking underlying chain consensus mechanism, which is equivalent to a chain-level security consensus. Therefore, the combination of MPC and AVS can provide Trading Bots with a tradeoff matching trading solution.
However, MPC involves processes of private key sharding, multi-party computation, and signature combinations. AVS nodes require message transmission and consensus matching, which will likely introduce some delay compared to purely centralized Bot solutions.
However, considering the polarized rug incidents, this kind of enhanced security consensus that sacrifices some efficiency is very necessary. The key is that MPC is relatively flexible in managing multi-signature assets, allowing for the setting of fast, standard, and strict channels for small, regular, and large transactions respectively.
Moreover, since AVS is also a lightweight consensus solution that flexibly captures additional verification capabilities of nodes, the combination of the two will explore more fragmented trading application scenarios, providing Trading Bots with an optimization direction that balances efficiency and security.
