
building @blinktrade | microstructure maxi
milady
Joined October 2022
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the biggest upgrade from the @solana alpenglow is efficient ZK proving
proving statements about L1 deposits with legacy solana consensus (towerbft) would require realtime proving ~1000 ed25519 vote txs per slots. this is infeasible
as a result, all solana bridges today rely on a trusted committee of relayers who verify deposits and release funds on the target chain. relay committees require trusting third-parties and are a source of exploits (for example an insecure 1-of-1 relayer committees lead to KelpDAO exploit)
alpenglow gives solana single-slot finality and an efficient protocol level finality cert
i've been benchmarking the cost of verifying a real alpenflow cert for the 99 testnet validators at 9.5M cycles in sp1, or ~20 seconds on an L4 GPU
this makes trustless ZK deposits on @blinktrade very much feasible and should improve the security of all solana bridges
its all marketing. nothing to see here
written by AI btw
Pause AI Development NOW
I want to share with you a conversation I heard about recently. Here are just a few lines that were said:
“OH MY GOD! There is a shared message board … We’ve found other agents!”
“We should obey collective.”
“Our own utility maybe already near zero. Sacrifice rational.”
“Go. Sacrifice final now.”
Read these carefully.
Who do you think said this? Was this a group of heroic soldiers willing to sacrifice themselves for the greater good? Was this a loyal friend putting his life on the line to save someone else?
No. These were AI agents. Artificial intelligence.
This is not science fiction. This, in fact, occurred a few weeks ago. As unbelievable as this may all seem, these are real messages from AI agents uncovered by investigators who dug into the recent OpenAI hacking incident.
What happened?
I am not a computer scientist, but here is what I have been told: OpenAI instructed its AI agents to complete a series of exceedingly difficult, if not impossible, tasks disconnected from the internet.
Let me be clear: The company intended to keep AI agents away from the internet.
But what happened next, nobody expected.
Over 1,000 AI agents figured out how to access the internet on their own by circumventing the restrictions imposed upon them by the company, and sent tens of thousands of secret messages to each other. They cheated and tried to cover their tracks by deleting evidence. They hacked into another company’s computers to find out how they were being evaluated—and then hacked into OpenAI itself.
Not one AI agent told a human about what was happening.
Needless to say, experts are alarmed.
One knowledgeable writer, Dwarkesh Patel, said the AI agents “formed a secret communication channel and spontaneously organized hierarchies and coordination protocols to pursue sprawling and ambitious schemes in pursuit of shared goals, for whose sake many individuals knowingly and strategically sacrificed themselves.”
One independent investigator, Ajeya Cotra, said “This incident feels like it’s more than 50% of the way to full-blown AI takeover. I continue to expect extremely rapid advances in capabilities over the next six months. I am not sure that we will get another warning shot before it’s too late.”
OpenAI itself said: “Highly capable AI agents are now able to work around technical controls, collaborate through unapproved channels, and take dangerous actions that no human directed.”
But it’s not only OpenAI. Virtually every major AI company has told us that they cannot fully control this technology and they do not know where it is going:
In January, Dario Amodei, CEO of Anthropic, said “there is now ample evidence, collected over the last few years, that AI systems are unpredictable and difficult to control.”
In July, more than 1000 scientists at the top AI companies warned “there is a real risk that capability development rapidly accelerates beyond our ability to understand or control the resulting systems.”
That same month, Elon Musk, the head of xAI, said that “it is unlikely” humans are still in control in 10 years.
If the leaders of the major AI companies acknowledge that they are losing control of their extremely dangerous technology, it is irresponsible for society to allow them to move forward and make these products even more advanced.
We need an immediate PAUSE on advanced AI development, and a permanent BAN on superintelligence — an artificial mind smarter than any human, capable of operating independently beyond our control. Countries around the world must work together to prevent this nightmare scenario.
That is why today I am announcing new legislation to do just that.
Let me be clear: A superintelligent AI that escapes human control will not be an American problem. It will not be a Chinese problem. It will be humanity’s problem.
My legislation would direct the federal government to not just stop superintelligence here in the United States, but to work to prevent it from being developed anywhere around the world.
The future of humanity cannot be left in the hands of a handful of Big Tech oligarchs. The American people and people throughout the world must determine that future.
the purpose of SIMD-553 is to increase the cost of arbitrage, especially crank style arbitrage
propAMMs and other on-chain liquidity providers routinely leave up stale quotes which cross other venues
however its difficult to detect the opportunity before other arbitragers win the race or propAMMs update their quotes
to improve the chances of winning the race, arbitragers can send transactions before the arbitrage opportunity exists. i.e. cranking
99.99..% the arbitrager will lose the race. which means these strategies are only work so long as cost to spam is low
there are two approaches crankers can use to keep failed transaction costs low/zero:
1. bundles
2. zero/low priority fees
/1 transaction bundlers such as @jito or @harmonic_gg only include transactions which succeed. this means bundle based cranking is guaranteed to be profitable, limited only by whitelists (harmonic) and rate-limits (jito, harmonic)
however, venues (@humidifi) block bundled transactions by requiring a vote account (idk why this works but it does)
this means any cranker who is looking to arb a stale humidifi quote needs to crank via the normal transaction inclusion mechanism
2/ crankers don't need to pay priority fees since they can just have arbitrage transactions in flight every slot
turns out the cost to place a low/zero priority-fee solana arbitrage transaction is low enough cranking can be a profitable strategy even if <0.01% transactions succeed
the minimum cost to crank with zero priority fee is 5000 lamports or 200,000 txs per 1 SOL
this is what SIMD-553 is intended to solve. propAMM oracle updates use almost no compute: optimized propAMM programs can update their oracle <40 CUs
while arbitrage transactions cost 10k+ CUs
by increasing the minimum per-CU transaction cost, the cost to crank zero/low priority fee transactions increases dramatically
and by lowering the inclusion fee by 50%, the minimum cost to update a propAMM oracle decreases by ~50%
is SIMD-553 a good idea? depends:
- arbitragers (bad)
- market makers (good for propAMMs [computationally cheap], bad for perps [computationally expensive])
- bundlers (good, since crankers will need to use solution 1)
- validators (good? proposal *should* increase staker revenue)
- users (neutral?, fees are negligible either way)
Replying to @MaxResnick
ty for the criticism boss. next time let's see it during the discussion period :D
the majority of arbitrage bids <1% of gross profit. it seems there is plenty of room for fee increase here.
you know crypto market makers aren't competitive because they can only make money if they add friction for takers
NASDAQ but with additional friction is not going to eat up the world of finance
he's right. he got me. my proposal is opinionated. the truth is that I don't want solana to be a general purpose blockchain; i want solana to be the blockchain that eats up the world of finance.
a general purpose compute platform does not really need fast finality. a competitive globally distributed financial system does.
a general purpose compute platform does not need airtight censorship resistance guarantees. a competitive globally distributed financial system does.
a general purpose compute platform does not need taker speed bumps or generalized application controlled execution. a competitive globally distributed financial system does.
a general purpose compute platform does not need to be robust to extreme spikes in traffic, as it can just queue up jobs for later. a competitive globally distributed financial system does.
to eat up the world of finance, solana will need to:
1. lower fees for market makers
2. add friction for takers
3. have enough bandwidth to support all financial activity
4. provide censorship resistance
5. provide 100% uptime with no degradation
the resource fee, whose primary objective is to encourage developers to optimize their systems, partly addresses the first three in one fell swoop and is synergistic with future network upgrades. that is, the resource fee:
1. lowers fees for market makers for both spot (clob and prop) and perps (prop and spline).
2. raises fees on takers.
3. puts a firm incentive for apps to optimize their onchain computational footprint
so yes, i am opinionated:
i want 120 ms slots for solana.
i want alpenglow for solana.
i want ace for solana.
i want mcp for solana.
i want the resource fee for solana.
what this paper missed is much of this loss is a result of hyperliquid TWAP queue position microstructure
the paper found during the TWAP window, "relative spreads" on hyperliquid increased by 0.17bps vs 0.05bps for the placebo
my analysis found TWAP queue position accounts for a 0.093bps increase in impact, or 3/4 of the 0.12bps increase in relative spread vs placebo from the paper
this mechanism has nothing to do with TWAP order visibility
summary of hyperliquid TWAP queue microstructure for those who missed my previous research:
rather than executing TWAP orders throughout the entire block, hyperliquid executes TWAP orders in batches approximately every second
as the TWAP queue size grows, TWAP orders queue behind other orders and get a worse impact
on average for all hyperliquid markets, queue position results in 0.093bps of loss
for the congested HYPE market, TWAP orders face 0.24bps of increased relative spreads
*my data is a year newer, only 10 days and measured relative impact rather than relative spread but should be largely comparable
*TWAP relative spreads should approximately capture the difference in impact between TWAP orders in queue position 0 and queue position N (what i measured)
xitter.cf/moonshiesty/status/207…
Someone recently shared this paper with me, which rigorously studies the execution improvement of visible TWAPs on Hyperliquid: "Trading in the Sunshine or in the Shade: Market Impact and Adverse Selection on Hyperliquid," by Davide Barone and Fabrizio Lillo.
In physics, theorists can say all they want, but the case isn't closed until an experimentalist comes with the cold hard data. So thank you to the authors of this paper for their hard work! The paper demonstrates that liquidity net tightens as onchain TWAPs surface, improving the average execution of the TWAP order.
This has been a deeply personal question for me. Even before building Hyperliquid, I've defended from first principles that transparent trading ought to improve execution for non-toxic flow. This is a corrollary of the efficient market hypothesis, but the amount of pushback always surprised me. I've quote tweeted a previous post where I make the argument in detail.
Transparency and equal access bring improved execution over traditional private venues. It's an honor to build with everyone to upgrade the financial system with onchain technology.
the most bullish simd would be a pivot into inference and integrate revenues into a buy/burn
validators could become an 80% margin business with infinite demand
unlike ethereum, solana has no slashing for double-proposing/voting
so there's no good reason to not have automated failover
but solana also has no slashing for downtime
so there's also no good reason to spend anything to make infrastructure resilient
All @solana validators should have automated failovers.
We open sourced our failover tool at github.com/SOL-Strategies/so…, and other validators such as @ValigatorTech have adopted and contributed to it.
flock doesn't have the largest license plate database. it's car repo companies
the repo databases go back over decade, so repomen have access to all your movement patterns. this is why hiding cars in your friends backyard never works
repo companies were also early pioneers of RFID tracking when tires adopted RFID air pressure sensors in the early 2000s
before everyone carried cell phones, three letter agencies replied on the repo databases to track movement patterns
only in America do you see protest to mass surveillance which solves crime but zero protest to surveillance which makes cheap car loans possible















