Recently, there has been a heated discussion around the Trading Bot Rug event. Many people are puzzled as to why such a popular on-chain PVP trading tool relies on a centralized custody method that seems to insult intelligence at first glance.
The question arises: how should a high-performance chain resolve the contradiction between meeting the demands of high-frequency trading matching and decentralization?
Could UTONIC’s AVS+MPC security enhancement service be a tradeoff solution?
1) Although users have long been wary of centralization, with the rise of high-performance trading chains, AI agents, and MEME on-chain PVP trends, a Bot execution trading paradigm that cares more about performance matching has desensitized all of this. Regardless of how secure the Trading Bot is, any platform that can successfully buy or sell on Fomo sentiment can gain a good reputation.
However, after the Dexx incident, many people are likely to prioritize 'security' because sacrificing security for efficiency could ultimately lead to a total loss.
2) So, why do high-performance public chains like Solana and Ton still engage in centralized matching trading, and why do Trading Bots sacrifice decentralization in pursuit of efficiency?
In simple terms: since chains like Ton and Solana are primarily focused on high-performance matching, users interact with single-point and chain server nodes, making it easy to fail due to transaction congestion during peak periods, resulting in a poor experience.
Trading Bots essentially perform off-chain pre-packaging and matching, confirming collectively on-chain in the end. Therefore, the latency perceived by ordinary users can reach millisecond levels and can reduce the likelihood of orders entering the Mempool being subjected to MEV.
The downside is that this type of pre-processing matching requires a centralized account bulk packaging design, initiated by a single entity for aggregated on-chain transactions, thus avoiding the independent on-chain behavior of dispersed users. Therefore, it relies on a somewhat centralized asset custody method.
3) This has certain similarities with the Pre-Confirmation mechanism being explored in the Ethereum ecosystem. The core logic is to add as many layers of pre-processing matching as possible before transactions go on-chain. Thus, there exists a tradeoff method that can simultaneously accommodate decentralized security verification and high-performance efficiency.
In the following text, Utonic shares a method based on Restaking for enhancing AVS security consensus + MPC multi-signature sharded private key management to explore decentralized custody solutions for Trading Bots. I will analyze it according to their line of thought.
1. MPC is a multi-signature encrypted asset custody solution where users, Bot platform parties, and Utonic AVS validators each hold a part of the private key shards. If the signature threshold is set to 2/3, immediate transactions are completed collaboratively by the Bot server and the user, while sensitive withdrawal processes for certain special assets are handled by the AVS validation 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 the sharding architecture design of Workchain, which naturally supports a multi-chain structure. As an application-specific chain for a service application, the verification mechanism must consider the complex real-world scenarios of App implementation.
The AVS mechanism appearing in the Ton ecosystem is similar to the EigenLayer AVS mechanism in the Ethereum ecosystem. Both provide a more flexible security output method for broader specific application scenarios. The flexible verification rules and sharding scalability of Ton will allow the AVS consensus layer to consume less time, meeting the high-frequency trading matching needs of Trading Bots.
3. The separate appearance of MPC may give a centralized impression of multi-signature governance committees controlling private keys. However, the AVS network is a decentralized distribution secured by the Restaking consensus mechanism, which defaults to an equivalent security consensus at the chain level. Therefore, the combination of MPC + AVS can provide a tradeoff matching trading solution for Trading Bots.
However, MPC involves the processes of private key sharding, multi-party computation, and signature combination, while AVS node verification requires message transmission and consensus matching processes. Compared to purely centralized Bot solutions, there will certainly be a possibility of some latency.
However, considering the polarized Rug incidents, this sacrifice of certain efficiency for enhanced security consensus is very necessary. The key is that MPC is relatively flexible in managing multi-signature assets, allowing for the setting of quick, standard, and strict channels for small, ordinary, and large transactions respectively.
Additionally, AVS is also a lightweight consensus solution that flexibly captures the 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.
