Penalty System for tips and mev

Both the smoothing pool and the merge-readiness fork on github rely on a penalty system, on which no information has been shared.

Is this system already designed and implemented? Is this system part of the test on kiln? Will this system be part of the upcoming audits? If so, I think it would be extremely important to get the community input on this, before it is too late to react to feedback.


For anyone new to the topic, the team has some analysis documented in the link below.

Seeing how close the merge (potentially) is, it’ll be good to hear about any updates (on decisions/implementation approach) that the team has on the proposal fee tips and (maybe later) mev.

My understanding of this right now is: the smart contract changes that are currently in audit include RocketNetworkPenalties.sol.

This contract allows oDAO nodes to vote to apply a penalty to a specific minipool. The first two penalties will have no effect. Starting with the third, there will be a fixed penalty value that can be adjusted through a settings change. 51% of oDAO is necessary to reach consensus.

All existing minipools already have the logic to apply this penalty on exit built in. The guardian is able to change the maximum penalty rate. There is no way to apply a penalty in this way to the RPL collateral, this only touches ETH. The details of what constitutes a punishable offense and how the oDAO is checking for it will be part of the smart node. This smart contract is just the way to put it on chain.

Please check out my new post MEV and Penalty System