Eden Network

Chris Piatt Jeffrey Quesnelle Caleb Sheridan

[email protected] [email protected] [email protected]
August 6, 2021

Abstract
Miner Extractable Value (“MEV”) creates a natural tension between block producers,
bots, applications, and general network users. Moreover, upcoming network level changes to
Ethereum (EIP-1559, Eth 2.0) introduce significant uncertainty to block producer rewards.
We propose an optional, non-consensus breaking transaction ordering protocol which allows
participants to guarantee placement within blocks and protection from arbitrary reordering
(e.g “frontrunning”, “sandwiching”). The system offers a transparent and fair set of rules to
order transactions within each block. An accompanying token reward system realizes MEV
profits to block producers to maximize network security.

Introduction
In a typical blockchain network, a series of transactions which alter the global state of the network
are bundled into groups (“blocks”) which are then appended to the consensus chain (thus, a chain
of blocks). The specific mechanism for selecting who has the right to create the block varies from
network to network. In a proof-of-work system there is a competitive game to produce some
computationally expensive result. In proof-of-stake, the producer of the block is probabilistically
selected from a set of economically staked participants.
In both systems, the producers of blocks typically have various freedoms allowed by the network.
Two common freedoms are the choice of selecting which transactions are included in the block, and
the order that their state transitions take effect. Miner Extractable Value [DGK+ 19] refers to any
benefit the block producer can realize for themselves by exercising these freedoms.
The particular type of MEV that can be realized varies from the fairly benign, e.g. taking
advantage of a freely available arbitrage opportunity, to the extremely aggressive, e.g. frontrun-
ning and sandwich attacks [ZQT+ 20] or malicious chain reorganizations, e.g. time bandit attacks.
Ultimately, all MEV can be interpreted as a tax on network participants.

MEV Ecosystem
Under EIP-1559’s base fee burn mechanism, Ethereum block producer profits may become much
smaller and harder to predict. While historically block producers have realized MEV passively via
transaction fees earned from bots outbidding each other for priority inclusion in the next block
(so-called Priority Gas Auctions or “PGAs”), mining pools have implemented solutions to more
directly extract MEV.

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 Services such as Flashbots, MiningDAO, and CowSwap are examples of products within the
Ethereum ecosystem that either funnel MEV towards or away from block producers. In particular,
as of July 21, 2021 a majority of Ethereum network hashrate has migrated to MEV-Geth, a fork
of the reference go-ethereum client (a.k.a “geth”) created by Flashbots. MEV-Geth allows third
parties to engage in a sealed-bid auction to order mempool/privately submitted transactions with
the goal of increasing the Ether balance transferred to the block producer’s address, i.e. directly
extracting MEV.
The four key stakeholders in the MEV ecosystem are block producers, bots, applications, and
general network users. Existing approaches to MEV skew incentives in favor of some subset of
these stakeholders, and as a result, there is competition among network participants around the
redistribution of value extracted through on-chain ordering opportunities.
Eden Network takes a user-focused approach to the MEV problem, and includes stronger in-
centives for all stakeholders driven by a protocol token. It comprises a novel transaction ordering
mechanism and a private relayer that any user, application, or bot can leverage in order to ob-
tain state guarantees around submitted transactions. Honest block producers are rewarded in the
protocol token for mining as per the ordering mechanism.

Eden Network
Network Objectives
The broad aims of the network are to:

1. Protect users from malicious MEV (frontrunning, sandwich attacks, etc.) and reduce the
negative externalities MEV has on Ethereum

2. Improve earnings for block producers and increase consensus-level security against block
reorganization

3. Tokenize access to MEV, and redistribute value to network stakeholders

Block Construction
The primary coordination unit among block producers, users, and bots will be the EDEN token,
which is a migration of the existing ARCH token. The basic hierarchy of a transaction is as follows,
and is illustrated in Figure 1:

1. Create a new class of transactions that get priority above all other transactions in Eden
Network block producers’ blocks

(a) There are a set number (31 ) of “slots”, each with a unique index (i.e. slot 0, slot 1, etc.)
that indicates their position within blocks
i. At any time, each slot is owned by exactly one account (the “slot tenant”), who has
the right to set a “delegate address” for that slot
ii. Transactions to (Ethereum transaction field to) the delegate address will be included
in the slot
iii. The delegate address may be either an EOA (a regular account) or a smart contract
address

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 iv. Transactions submitted directly to the Eden Network relay that revert (fail) have
the option of not being included in the block, saving the sender gas fees
(b) Each slot has a maximum gas limit (1.5M1 )
i. Transactions to the delegate address that do not fit in the slot due to the gas limit
will be treated according to the regular transaction inclusion criteria
ii. In the event that a slot’s gas limit is not reached, the remainder of the gas space is
usable by the rest of the block
(c) Users reserve these slots via a continuous auction mechanism known as a Harberger tax
i. Slot tenants are taxed on a linear basis at some tax rate (3.3%1 ) per day on the
initial principal of their stake. The taxed amount is burned, and the tenant loses
their claim on the slot once their entire balance is depleted (301 days as per proposed
tax rate)
ii. Any user may become a slot tenant by staking a minimum of 110%1 the EDEN
staked by the existing slot tenant at the time the existing slot tenant bid for their
slot
iii. In the event that another user outbids the current slot tenant, the original slot tenant
is immediately eligible to claim any untaxed balance they have in the smart contract
(or increase their stake to reclaim the slot). Being outbid is the only mechanism to
recover an untaxed balance
iv. Once a slot tenant is outbid, they simply lose the slot instead of being pushed to the
following slot

2. Block producers are also allowed to accept transaction bundles. Bundles are be included after
any priority queue transactions, but before transactions from regular Ethereum/Eden users.
There is an overall gas limit for bundles (4M1 )

3. Regular users will also be able to stake EDEN in exchange for transaction ordering priority
and extra transaction handling options

(a) Regular transactions (whether from the Eden network or public mempool) will be ordered
first by staked EDEN balance then by ETH tip, and they will come after the priority
queue transactions + transaction bundles
(b) Users must stake a minimum of 1001 EDEN in order to gain the benefit of special
transaction handling options
i. Transactions submitted directly to the Eden Network relay by users with at least the
minimum stake will not be gossiped to other nodes to provide for enhanced privacy
and attack protection
(c) In future releases of the protocol, an unbonding period will be applied to the EDEN
tokens staked by any given address in this portion of the block

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proposed, tunable by governance

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EIP-1559 and Consensus Considerations
The ordering of transactions within a valid block is an optionality afforded to block producers
under Ethereum’s consensus rules. Eden Network’s block production preserves the transaction
fee mechanism of EIP-1559, and leaves transaction ordering to the distribution of EDEN token
balances across addresses. In particular, every transaction in an Eden Network block must pay
the Ethereum base fee, denominated in ETH, and the inclusion of such transactions participate in
EIP-1559’s block size and base fee recalculations. As such, Eden Network blocks are a strict subset
of the set of valid, potential Ethereum blocks that are acceptable under the consensus rules for a
specific block height.
The Eden Network also incentivizes block producers to not engage in network-antagonistic be-
havior such as time-bandit attacks or attempts to artificially reduce the base fee. Producers that
engage in such behavior jeopardize all future revenue from the Eden Network, and thus greatly
raises the opportunity cost of antagonistic actions.

Protocol Incentives
Block producers on the network who include transactions according to the protocol design will
receive rewards at the rate of 60% issuance in monthly supply at steady state.

1. In the first month of launch, block producers receive increased rewards according to the
amount noted in Appendix B

2. If a block producer does not order transactions submitted by EDEN holders in the order of
their staked balances, or does not place slot transactions in their appropriate slot, the block
producer will not receive their share of EDEN rewards

(a) If an Eden block producer continuously violates the ordering rules of the protocol, they
may be voted out of the network or have future rewards slashed

Block Producer Reward Procedure

For a given block producer that participated in Eden Network honestly over the course of an
epoch, that block producer is “owed” some EDEN reward according to the emission schedule in
proportion to their contribution to all produced Eden blocks. The exact calculation of owed balances
is performed in a decentralized manner by a subgraph on The Graph.
To remit payments, an admin address generates a Merkle tree of these balances and posts the
root of the tree to a distributor contract. Each new distribution mints a non-transferable ERC-721
NFT owned by the distributor contract whose metadata is an IPFS URI to the full set of Merkle
proofs. Any block producer (or their delegated claimer account) can present the Merkle proof for
their address to the distributor to claim their rewards.
The initial epoch length will be one day.

Eden DAO
Block Producers that participate in the Eden network are the core members of Eden DAO. The aim
of this DAO is to ensure that block producers submit blocks in accordance with the Eden Network
implementation of geth, and do not censor, reorganize, or insert transactions in a given block.

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Figure 1: Block construction in Eden

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 Eden takes an optimistic approach towards the problem of block producer deviation. The
network will vote to include or exclude block producers from the network, where inclusion is defined
as being included in the whitelist of Eden block producers eligible for mining rewards, and exclusion
is defined as removal from the whitelist.
Any block producer is eligible to join the Eden Network, and become a voting member of
Eden DAO by procuring EDEN tokens. Over time, the block producer onboarding process will
decentralize via DAO governance.

EDEN Token
Overall Distribution
The total supply of EDEN is set to a maximum of 250,000,000 tokens2 . The inflation parameter is
given by the following curve

5.595 × 106 − 1.5 × 106 × log10 M 1.797 , 0





Monthly Inflation = max
Since the Harberger tax implementation creates perpetual deflationary pressure on the circu-
lating supply of EDEN, and the network mints new tokens at an exponentially decreasing rate, we
can counteract the implied scarcity through a net emissions mechanism. In a future release of the
protocol, the network will mint additional tokens equal to the minimum tokens burnt in a given
day or 66,000 tokens as part of a net issuance mechanism.
Monthly inflation is distributed as follows:

1. Block producers: 60%

2. Liquidity Providers: 30%

3. EDEN Treasury: 10%

Initial Distribution
In order to incentivize block producer onboarding in the initial phases of the network, 10,000,000
EDEN tokens will be dispensed by the EdenDAO treasury in the first month. The amount is
segmented as follows:

1. 8,100,000 EDEN tokens distributed via daily emissions to validators and liquidity providers

(a) 5,400,000 tokens allocated for validators

(b) 2,700,000 tokens allocated for liquidity providers

2. 1,000,000 EDEN tokens airdropped to key bots, validators, and users

3. 900,000 tokens are returned to the treasury as per emission schedule

2
The full issuance schedule is outlined in Appendix A

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Conclusion
Eden Network’s transaction ordering protocol for Ethereum allows free markets to dictate own-
ership of blockspace over a continuous time period. The network uses a private relayer to allow
users, applications, and bots to guarantee placement and protection from arbitrary reordering of
transactions. The coordination unit of the network, EDEN token, doubles as a tokenization of
future blockspace demand. This effectively providers synthetic exposure to MEV that any network
participant can get access to. The mechanisms core to the network are designed to serve the long
term interests of applications, users and block producers, and increase the utility of the Ethereum
network as a whole.

References
[DGK+ 19] Philip Daian, Steven Goldfeder, Tyler Kell, Yunqi Li, Xueyuan Zhao, Iddo Bentov,
Lorenz Breidenbach and Ari Juels. Flash Boys 2.0: Frontrunning, Transaction Reordering, and
Consensus Instability in Decentralized Exchanges. arXiv:1904.05234 [cs.CR], April 2019.

[ZQT+ 20] Liyi Zhou, Kaihua Qin, Christof Ferreira Torres, Duc V Le and Arthur Gervais. High-
Frequency Trading on Decentralized On-Chain Exchanges arXiv:2009.14021 [cs.CR], Septem-
ber 2020.

A Supply Schedule (48 Months)

Month Supply Inflation Amount

0 100,000,000
1 120,000,000 20,000,000
2 124,783,574 4,783,574
3 129,092,493 4,308,920
4 133,064,641 3,972,147
5 136,775,567 3,710,926
6 140,273,060 3,497,493
7 143,590,098 3,317,038
8 146,750,819 3,160,721
9 149,773,659 3,022,839
10 152,673,159 2,899,500
11 155,461,085 2,787,926
12 158,147,152 2,686,067
13 160,739,517 2,592,366
14 163,245,129 2,505,612
15 165,669,975 2,424,846
16 168,019,270 2,349,295
17 170,297,595 2,278,325
18 172,509,008 2,211,413
19 174,657,127 2,148,120
20 176,745,201 2,088,074

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 21 178,776,159 2,030,958
22 180,752,659 1,976,500
23 182,677,121 1,924,463
24 184,551,762 1,874,641
25 186,378,615 1,826,853
26 188,159,554 1,780,939
27 189,896,313 1,736,759
28 191,590,498 1,694,186
29 193,243,605 1,653,106
30 194,857,024 1,613,420
31 196,432,059 1,575,035
32 197,969,927 1,537,868
33 199,471,773 1,501,846
34 200,938,671 1,466,899
35 202,371,636 1,432,965
36 203,771,623 1,399,987
37 205,139,535 1,367,912
38 206,476,228 1,336,693
39 207,782,513 1,306,285
40 209,059,161 1,276,647
41 210,306,902 1,247,741
42 211,526,433 1,219,532
43 212,718,419 1,191,986
44 213,883,492 1,165,073
45 215,022,258 1,138,766
46 216,135,294 1,113,036
47 217,223,155 1,087,860
48 218,286,369 1,063,214

B First Month Issuance (Cumulative)

Day Total Block Producer LP Incentives Treasury Airdrop

0 1,000,000
1 3,000,000 1,200,000 325,714 1,132,000 1,000,000
2 5,564,103 2,738,462 651,429 1,252,000 1,000,000
3 7,360,510 3,816,306 977,143 1,334,500 1,000,000
4 8,742,998 4,645,799 1,302,857 1,397,357 1,000,000
5 9,866,594 5,319,956 1,628,571 1,448,126 1,000,000
6 10,812,966 5,887,780 1,954,286 1,490,707 1,000,000
7 11,630,405 6,378,243 2,280,000 1,527,374 1,000,000
8 12,349,829 6,809,897 2,524,286 1,559,569 1,000,000
9 12,992,227 7,195,336 2,768,571 1,588,264 1,000,000
10 13,572,498 7,543,499 3,012,857 1,614,147 1,000,000
11 14,101,599 7,860,959 3,257,143 1,637,718 1,000,000

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 Table 2 continued from previous page
12 14,587,822 8,152,693 3,501,429 1,659,358 1,000,000
13 15,037,598 8,422,559 3,745,714 1,679,358 1,000,000
14 15,456,008 8,673,605 3,990,000 1,697,949 1,000,000
15 15,847,142 8,908,285 4,152,857 1,715,318 1,000,000
16 16,214,339 9,128,603 4,315,714 1,731,614 1,000,000
17 16,560,360 9,336,216 4,478,571 1,746,963 1,000,000
18 16,887,513 9,532,508 4,641,429 1,761,468 1,000,000
19 17,197,751 9,718,651 4,804,286 1,775,218 1,000,000
20 17,492,737 9,895,642 4,967,143 1,788,287 1,000,000
21 17,773,899 10,064,339 5,130,000 1,800,740 1,000,000
22 18,042,475 10,225,485 5,187,000 1,812,632 1,000,000
23 18,299,545 10,379,727 5,244,000 1,824,012 1,000,000
24 18,546,052 10,527,631 5,301,000 1,834,921 1,000,000
25 18,782,832 10,669,699 5,358,000 1,845,397 1,000,000
26 19,010,623 10,806,374 5,415,000 1,855,473 1,000,000
27 19,230,081 10,938,049 5,472,000 1,865,179 1,000,000
28 19,441,796 11,065,078 5,529,000 1,874,541 1,000,000
29 19,646,295 11,187,777 5,586,000 1,883,582 1,000,000
30 19,844,054 11,306,432 5,643,000 1,892,324 1,000,000
31 20,000,000 11,400,000 5,700,000 1,900,000 1,000,000