Arguments that MEVil caused by future AMMs on Bitcoin L1 will/won’t be a concern
TLDR:
If you think bitcoin L1 AMMs will have significant volume, then you believe MEVil will be a concern and vice versa.
If you think bitcoin L1 AMMs will leak MEVil as they do in other ecosystems, then you believe MEVil will be a concern and vice versa.
It’s clear to me that whatever your answer is to the above question will significantly affect what future bitcoin fork you want to support.
It’s also clear to me that this question has no clear answer because there are underlying assumptions being made about the future. So, the only way to move forward is by making very clear the open-ended questions and the opposing arguments for each side.
Will L1 AMMs have significant volume?
Yes:
AMMs are useful for one thing: trading memecoins.
There clearly is demand to do memecoins on the L1 today, and there could be more demand in future if demand to use bitcoin vs alt-chains increases. Versus other places to trade, L1 AMMs will have many benefits such as being more censorship resistant, more resilient, more secure since less bug risk than using a L2, easier to use, and more liquid.
No:
There won’t be enough memecoin volume in the future because memecoins are largely scams and such will go away over time.
There won’t be enough demand to trade memecoins on bitcoin because people won’t care whether memecoins are on bitcoin or another chain.
The 10 minute blocktime and small blocksize will make trading memecoins on bitcoin too expensive, and the benefits of using a L1 AMM won’t outweigh the costs.
Will L1 AMMs cause MEVil?
Yes:
Every AMM on Ethereum, which has invested billions into preventing MEVil, leaks MEVil. The proposed AMM designs for bitcoin today also leak MEVil.
Every AMM design that tries to reduce MEVil is way too impractical to implement and use.
No:
Someone will think of an idea to create an AMM for bitcoin L1 that won’t leak MEVil and that people will use. No one will use the MEVil leaking AMMs.
Is MEVil bad?
Yes:
MEVil by definition causes miner centralization. If you don’t care about decentralization, bitcoin is not for you.
No:
I have no good argument here.
This post doesn't discuss what bitcoin consensus changes can yield L1 AMMs that cause MEVil.
This post doesn't discuss whether or not having more MEVil could be worth the tradeoff.