Can Trading Bot escape the dilemma of centralized hosting?

Author: Haotian

The Trading Bot Rug incident has been a hot topic these days. Many people are puzzled as to why Trading Bot, a popular PVP hot-shot on the blockchain, relies on a centralized hosting method that is obviously humiliating to the IQ at first glance?

The question is, how should high-performance chains deal with the conflict between high-frequency trading matching needs and decentralization? Will the AVS+MPC security enhancement service of @UTONIC_uTON be a tradeoff solution?

1) Although for a long time, users have been afraid of centralization, but with the prevalence of high-performance trading chains, AI Agents, and PVP on MEME chains, a Bot-based trading paradigm that cares more about performance matching has made all of this "desensitized", not to mention the safety factor of Trading Bot. Any platform that can successfully buy or sell on Fomo emotions will have a good reputation.

However, after the Dexx incident, it is estimated that many people will put "security" first, because the efficiency gained by sacrificing security may end up in vain.

2) So, why do public chains such as @solana and @ton_blockchain, which focus on high performance, still do centralized matching transactions, and why does Trading Bot sacrifice decentralization for efficiency?  

In simple terms: Since chains such as Ton and Solana focus on high-performance matching, users interact with chain server nodes at a single point, which can easily lead to failures due to transaction congestion during peak hours, resulting in a bad experience.

Trading Bot is equivalent to a pre-packaging and matching off-chain, and finally collectively confirming on the chain. Therefore, the delay perceived by ordinary users can reach milliseconds, and it can also reduce the possibility of orders entering Mempool and being MEV.

The disadvantage is that this type of pre-processing matching requires a centralized account batch packaging design, and a single entity initiates aggregated on-chain transactions, avoiding the decentralized independent on-chain behavior of users, so it will rely on a decentralized asset custody method.

3) This has something in common with the Pre-Confimation mechanism that the Ethereum ecosystem is exploring. The core logic is to have as many pre-processing matching links as possible before the transaction is put on the chain. In this case, there is a Tradeoff method that can take into account decentralized security verification + high performance and efficiency at the same time.

In the following, Utonic shared a Restaking-based AVS security consensus enhancement model + MPC multi-signature sharding private key management method to explore providing a decentralized custody solution for Trading Bot. I will analyze it according to its ideas:

1. MPC is a multi-signature encrypted asset custody solution. Users, Bot platform parties, and Utonic AVS verifiers are each in charge of a part of the private key shards. If the signature threshold is set to 2/3, instant transactions are completed by the Bot server and users in collaboration, while some sensitive links of special asset withdrawals are completed by the AVS verification network and users.

This is actually equivalent to a hierarchical management of asset application scenarios, giving the Bot platform more permissions in real-time high-frequency transactions, and giving the AVS platform more permissions when it affects the asset security link;

2. The Ton public chain adopts the sharding architecture design of Workchain, which naturally supports multi-chain structure, and as an application-specific chain serving Applicaiton, the verification mechanism must consider the complex real-life App landing scenarios.

The AVS mechanism that appears in the Ton ecosystem is similar to the @eigenlayerAVS mechanism of the Ethereum ecosystem, both of which provide a security consensus layer to a wider range of specific application scenarios in a more flexible and secure output manner. Ton's flexible verification rules and sharding scalability will shorten the time consumed by the AVS consensus intervention layer, meeting the needs of high-frequency matching transactions of Trading Bot.

3. MPC alone will also give people a centralized visual sense of the multi-signature governance committee controlling the private key, but the AVS network is a decentralized distribution and a security consensus model guaranteed by the consensus mechanism of the underlying chain of Restaking. By default, it will be equivalent to the security consensus at the chain level. Therefore, the combination of MPC+AVS can give Trading Bot a Tradeoff matching transaction solution.

However, MPC has the process of private key sharding, multi-party computing, and signature combination. AVS node verification requires message transmission and consensus matching. Compared with the purely centralized Bot solution, there will definitely be a certain possibility of delay.

However, considering the polarized Rug event, this kind of security consensus enhancement that sacrifices a certain efficiency is very necessary. The key is that MPC is more flexible in multi-signature asset management, and can set fast, standard, and strict channels for small transactions, ordinary transactions, and large transactions.

In addition, AVS is also a lightweight consensus solution that flexibly captures the additional verification capabilities of nodes. The combination of the two will explore more fragmented trading application scenarios and provide Trading Bot with an optimization direction that takes into account both efficiency and security.