1 Year After Leaving Ethereum For Solana w/ Max Resnick

Max Resnick reflects on his year at Ansa, gaining respect for those managing Ethereum protocols and recognizing the complexities of steering a protocol amid diverse opinions. He highlights the visibility of both good and bad ideas within the protocol, emphasizing the importance of informed decision-making. As a liaison between engineers and product teams, he focuses on user experience, particularly in transaction processing, and aims to enhance Solana by prioritizing user needs.

Max discusses significant initiatives like the Minimum Censorship Protocol (MCP), which addresses transaction ordering and censorship, stressing the need for revenue generation through fees while balancing performance and profitability. He notes a shift in the Solana community towards a trading focus, influenced by his advocacy for Solana as a trading platform. He believes that many challenges are engineering-related rather than research-focused and that a blend of engineering and economic perspectives is vital for blockchain success.

He reflects on the challenges faced in Ethereum, where influential figures often dominate discussions, and emphasizes the need for caution in public statements due to their potential impact on perception. Max asserts that changing blockchain architecture is more feasible than altering the network effects of its contributors, believing Solana is currently the leading platform for crypto activity. He feels a personal responsibility to lead the MCP initiative, which aims to mitigate Miner Extractable Value (MEV) issues by ensuring censorship resistance in transaction processing.

Max distinguishes his approach from Ethereum's Proposer/Bidder Separation, focusing on reducing extractive practices at the validator level to enhance market efficiency. He discusses the importance of helping market makers avoid toxic flow to improve spreads and liquidity in trading, noting that the introduction of the Priority Gas Auction (PBS) has increased costs associated with toxic flow, leading to market inefficiencies.

Within the MCP, there is a strong consensus regarding the importance of censorship resistance, although debates continue about the necessity of the "hiding" property. He is actively involved in hands-on experiments related to the protocol, such as developing a transaction sender and a custom scheduler, while delegating final implementations to specialized engineers. The Application Control Execution (ACE) has been rebranded from Application Specific Sequencing (ASS) to provide a general-purpose chain that allows flexibility in transaction sequencing, although its relevance to MCP remains somewhat unclear.

The discussion highlights the role of prop Automated Market Makers (AMMs) in providing tighter spreads through high-frequency trading. A "deny list" is introduced to block toxic takers from trading, improving market efficiency. Humidify is noted as a prop AMM that does not utilize a denial list, allowing unrestricted trading and potentially leading to higher trading volumes. Concerns about the sustainability of Humidify's market dominance are raised, particularly regarding their tight pricing on certain pairs.

Max expresses confidence that tight pricing will likely continue, especially with the anticipated influx of block trades and the absence of fees on Solana. He discusses the historical dominance of SEP on Ethereum and their transition to Solana, noting the perception of the Ethereum market as settled, while Solana is recognized for its higher retail volume and improved trading experience.

The conversation also explores the impact of trading fees on user behavior, highlighting that many users are unaware of the significant fees they incur, particularly when using Telegram bots on Ethereum. In contrast, Solana users may face higher landing fees and lower execution quality, potentially leading to significant losses on trades.

The discussion shifts to the IBRL project, noting a German exchange's impressive latency compared to Solana's block times. The speaker reiterates the long-term goal of achieving on-chain trading and price discovery, questioning the implications of latency on market structure. Gido addresses claims regarding Solana's structure resembling PBS, explaining challenges faced as validators prioritized fee maximization, leading to delayed transactions.

Concerns are raised about the effectiveness of continuous packing versus immediate release after packing, with the potential for valuable blocks to be delayed for enhanced value. The introduction of MCP aims to enhance transaction batching by breaking blocks into mini blocks while addressing concerns about prop AMMs and their impact on composability.

Hyperliquid emerges as a leading player in decentralized perpetuals, with speakers expressing admiration for its competence. The conversation highlights the strengths of Hyperliquid's team and the challenges Solana faces in competing effectively in the perps market. Technical requirements for successful perps trading are emphasized, including the need for a responsive front end and reliable transaction processing.

Improvements in Solana's uptime compared to traditional centralized exchanges are acknowledged, particularly due to advancements in the TPU pipeline. The necessity of a knowledgeable team in trading and microstructure is highlighted as essential for bootstrapping liquidity for new pairs. There is optimism about the potential for a capable team to develop an effective perp deck on Solana, despite its unique challenges. The conversation concludes with a recognition that building successful perp decks takes time, with a sense of optimism for future growth.