Marinade + MEV, part 2: The most popular restaurant on the block

A glimpse inside the Solana Restaurant (early 2022)…

Imagine a neighborhood restaurant with a twist: no matter what you order, fries, Coke, or a burger, it's all $1, paid in advance.

Most of the time, the restaurant operates well. People come to order their meals and leave the restaurant happy. It has many repeat customers.

But every once in a while, the restaurant has a lobster special — also just $1! — but only 500 of them. As you might expect, demand cripples the restaurant staff. Some customers even skip getting a table and ordering from a waiter. They go straight to the cooks for their lobster.

Even if you order and pay for your lobster in advance, there is no guarantee it will still be there when you arrive at the restaurant. But that isn’t much of a deterrent. After all, a $1 gamble on a fresh lobster isn’t too scary.

After a few lobster specials, customers begin getting savvier. Some users love lobster so much that they order it multiple times to ensure they get it. 5, 10, 15, 20 orders of Lobster! They order it from different waitstaff or even find a cook or two and pay them directly for it. Even savvier guests can check the staff schedule and pay those cooks directly before they even begin their shift. Get more lobster than they need? They can sell it quickly to more eager customers.

And even if a customer pays for 20 lobsters and only gets one back, they still get value.

But wait, what about the customers who showed up and order their regular burgers? Well, it’s likely lost in a sea of thousands of lobster orders. In fact, at times, the rush is so bad the kitchen crashes completely, and no orders are delivered.

Eventually, the lobsters are all served, the restaurant returns to the regular menu, and the staff can catch their breath. Customers come and get their burgers and fries and Cokes with no problem and leave happy, that is, until the next lobster shipment …

Fixing Solana’s block space supply and demand challenge

This story might sound familiar if you were a Solana user in early 2022, as NFT mints and other giant spikes in transactions caused network congestion and, at worst, halted the chain. While on most days, Solana is humming smoothly, quickly processing thousands of transactions per second, there were moments when bots sending thousands of transactions in hopes of an NFT mint or liquidation events caused Solana to suffer.

Many builders across the Solana community have spent time in 2022 examining how a balance can be achieved amongst all parties to ensure the network is always working as intended.

After all, it hurts to see that reliable and affordable local restaurant fail.

The Solana restaurant has learned from the past and evolved (it serves lobster almost daily!). It has adopted three critical improvements to running blockchain operations:

A Restaurant and Bar

The Solana restaurant is now split between two service categories: a bar and a dining room. The bar, tiny with a capacity of just 20, is full-service and always open for walk-ins. When the restaurant gets the lobster, getting served will take a bit longer.

Meanwhile, the dining room serves 80 people. But you must make a reservation to come.

Reservations

Introducing reservations now protects the restaurant from crashing at peak times. When a customer calls the restaurant, caller ID can help the restaurant distinguish between long-time repeating customers, first-time clients, or those known to have irrationally high amounts of orders to block others out.

This way, the restaurant can be picky about who to answer and how many seats to reserve. You must invest in the system to get a spot at the table. You need to buy the phone and, over time, build credibility connected to your number.

You can be sure of one thing as a customer seated by the table. No matter how loud the crowd at the bar is, shouting they want all the lobsters, you will get your order through. And most likely, your food will be served since the cook will commit to at least 1/100 of their capacity to you.

Introduction of ‘tips’

Even if you’re seated at the table, there could still be a case there is a single lobster left to serve. For this, the restaurant introduced a way for customers to prioritize their orders by paying an optional extra fee. This additional fee is paid on top of the flat tiny mandatory fee everyone needs to pay to order.

This extra fee goes to the cook preparing the meal, like a pre-paid tip. The cook looks through all the lobster orders, and rationally, they pick the one with the most significant tip. The customer paying the highest price gets the lobster. Those who don’t can, of course, still order something else.

Bringing this analogy back to the blockchain, the Solana community has determined how to effectively manage its block space by creating these service classes. So even during high demand, the types of high gas fees found on Ethereum or other L1 chains won’t be an issue. Most users don’t need the fastest possible transaction. They want their transaction processed successfully and relatively quickly for a low cost. In the new Solana, those users should remain satisfied, while power users can get their transactions through on the fastest possible block.

So how will this environment be managed? Marinade has a plan for that. We’ll share our place in the Solana restaurant in the third and final chapter of Marinade + MEV.

Marinade will be presenting in the MEV Camp in Lisbon on November 3rd prior to Breakpoint. For more information and to sign up, visit this registration link.