Introduction to Silo V2

v1 gets a boost.

The proposal for Silo v2 is to introduce high performance MEV-boosted staking on SEI and potentially other high potential rust-based chains. Where stakers will accrue all the benefits of the fastest L1. v2 will be designed to increase network health, and staker rewards through multiple technical approaches. With the core concentration around capturing MEV (Maximal Extractible Value) and remitting it back to the Sei network.

MEV on Sei

The modern tech stack of Sei was built to avoid negative MEV strategies, such as front-running and sandwiching transactions. While allowing positive MEV strategies such as back-running transactions. The issue Silo will look to solve with v2 is the redistribution of MEV to Users and Validators.

As trades are happening < 1 second, a traditional AMM dex will be subject to MEV at a much greater rate than Ethereum. Although the amount of MEV may not be similar to Ethereum’s. The quantity of MEV opportunities increase on Sei due to increased throughput and block times.

Network Optimization

The largest proposed update to Silo will be setting a standard for validators by creating an optimized validator client.

Since Sei is a high throughput L1 with low fees, we anticipate that the same game-theory will play as has played out on Solana. On Solana, spammed transactions from searchers looking to include their bundle are ever present. To counter spam, an auction is be implemented where traders submit bids for their bundles to be included.

Enhanced Consensus

By validators supporting the new standard set by Silo, it will award Validators to extract additional value through MEV. It is important to note that unhealthy, or bad validators will not be delegated stake by Silo, further incentivizing Validators to act in the best interest of the Sei Network.