Written by: Haotian
Discussions around the Trading Bot Rug incident have been heated these past few days. Many people are confused as to why Trading Bots, which are currently a hot topic in on-chain PVP, rely on a centralized custody method that seems to insult intelligence at first glance.
The question arises: how should high-performance chains resolve the conflict between high-frequency trading matching needs and decentralization? Will the AVS+MPC security enhancement service from @UTONIC_uTON 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, a Bot execution trading paradigm that cares more about performance matching has desensitized all of this. Regardless of the security level of Trading Bots, any platform that can successfully buy or sell during Fomo sentiment will be well-regarded.
However, after the Dexx incident, many people will likely prioritize 'security' first, as sacrificing security for efficiency may ultimately lead to a loss.
2) So, why do high-performance public chains like @solana and @ton_blockchain still engage in centralized matching transactions, and why do Trading Bots sacrifice decentralization in pursuit of efficiency?
Simply put: since chains like Ton and Solana focus on high-performance matching, user interaction with chain server nodes can easily fail due to transaction congestion during peak times, leading to a poor experience.
Trading Bots essentially perform an off-chain pre-packaging and matching, ultimately confirming collectively on-chain, so the delay speed perceived by ordinary users can reach the millisecond level while also reducing the likelihood of orders entering the Mempool being affected by MEV.
The drawback is that this type of pre-processing matching requires a centralized account batch packaging design, initiated by a single entity to aggregate on-chain transactions, thereby avoiding the independent on-chain behaviors of dispersed users, thus relying on a somewhat centralized asset custody method.
3) This shares certain similarities with the Pre-Confirmation mechanism that the Ethereum ecosystem is exploring. The core logic is to add as many pre-processing matching steps as possible before the transaction goes on-chain. Thus, there exists a Tradeoff method that can consider both decentralized secure verification and high-performance efficiency.
In the following text, Utonic shares a model of enhanced security consensus based on Restaking + MPC multi-signature sharded private key management to explore providing decentralized custody solutions for Trading Bots. I will follow their reasoning to analyze it:
1. MPC is a multi-signature encrypted asset custody solution, where users, Bot platform parties, and Utonic AVS validators each manage a portion 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 operations of certain assets are completed by the AVS validation network and the user.
This is essentially a layered management of asset application scenarios, granting more permissions to the Bot platform during instantaneous high-frequency trading, while giving more permissions to the AVS platform when it affects asset security.
2. The Ton public chain adopts a sharding architecture design of Workchain, inherently supporting a multi-chain structure, and as a service Application specific chain, the verification mechanism must consider the complex real-world scenarios of App deployment.
The AVS mechanism appearing in the Ton ecosystem is similar to the @eigenlayerAVS mechanism in the Ethereum ecosystem, both providing a more flexible security output method for a broader range of specific application scenarios. Ton's flexible validation rules and sharding scalability will make the consensus layer of AVS require less time to consume, meeting the demands of Trading Bots for high-frequency trading.
3. The independent appearance of MPC may give the impression of a centralized control over private keys by a multi-signature governance committee, but the AVS network is a decentralized distribution guaranteed by the Restaking underlying chain consensus mechanism, which is equivalent to a 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 processes of private key sharding, multi-party computation, and signature aggregation, while AVS node verification requires message passing and consensus matching, which will inevitably introduce some potential delays compared to purely centralized Bot solutions.
However, considering the polarized Rug events, it is necessary to enhance security consensus at the expense of certain efficiency. The key is that MPC is relatively flexible in multi-signature asset management, allowing for quick, standard, and strict channels to be set for small, ordinary, and large transactions respectively.
Additionally, AVS is also a lightweight consensus solution that flexibly captures additional validation capabilities of nodes, and the combination of both will explore more fragmented trading application scenarios, providing a direction for Trading Bots that balances efficiency and security.
