Matchmaker V2

V2 of the Reservoir matchmaker is currently under development and should be released shortly. The V2 matchmaker has two additions compared to V1 - an implicit builder auction and programmable privacy.

Matchmaker-mediated Implicit Builder Auction

The V2 matchmaker conducts an Implicit Builder Auction in order to improve price execution for any orders that nominate it. This is an improvement over a last block auction because builders can optimize for the best solutions in the context of the current block being built. Here we describe the implementation details of this matchmaker V2.

• The matchmaker is nominated by users or applications who set the matchmaker as the exclusive authorizer in the order.

• Applications submit orders to the Mempool using intentful transactions Solvers listen to the Mempool for order discovery.

• For the first 9 seconds of the block, the matchmaker accepts solutions to users’ intents, and requires

  • A priority fee of 1 gwei
  • A dynamic tip that uses coinbase.transfer() to increase the tip quantity based on the total value to the user

• Matchmaker releases signatures to solves that conform authorizing submission

• Bundles sent to builders are then optimized for inclusion in the block, resulting in an implicit auction

  • Builders choose the bundles that maximize the value of the block
  • Since tips are dynamically set to be greater for bundles that improve user outcomes, builder prioritize bundles that increase user value while simulating against the current block being built.

  Learn more about Builder Auctions.

Programmable Privacy

In order to limit signal leakage, key aspects of orders can be concealed so the information cannot be used out of band. In particular, users might wish to hide the order maker address. While hiding token quanitities may also seem desirable, there is a better alternative: the matchmaker creates false orders so solvers can't be sure if an order is legitimate, which increases the risk of frontrunning.

• Users or applications opt into to concealed orders
• Orders are routed to matchmakers who reveal hints to solvers
• Solvers use the hints to propose viable solutions
• Matchmakers choose the best solutions and construct tx bundles
• Matchmakers submit tx bundles to builders

Learn more about Private Market Orders