xla·Oct 3rd, 2022

Introducing Zenith: the first Maximum Aggregate Value (MAV) market for the Interchain

Today, we introduce Zenith, the first Maximum Aggregate Value (MAV) market from Mekatek, revealing a new and necessary chapter to post-MEV. Zenith is a solution for validators to outsource block building, giving them access to a competitive market of searchers who construct the optimal block.

Cosmos is rapidly expanding. New users and use cases appear everyday. This thriving Interchain ecosystem has the potential and promise to change what it means for an individual to be sovereign.

However, there is reason for serious concern. As the Interchain takes shape and form, incentives between different actors are misaligned. Users, liquidity providers, validators and relayers are currently in gross imbalance, causing dangerous centralization forces. Left unsolved, we believe the Cosmos thesis of sovereign community governed computers will fail.

The Extraction Problem: Validator Oligarchy

A fundamental problem exists in how blockspace is currently bought and sold in the Cosmos. Incentives between actors in the Interchain are simply misaligned, leading to alarming forces that threaten the ecosystem’s values of openness:

  • Profit centralization. Actors are not rewarded with their value creation, creating cartelization and centralization forces.
  • No transparency. The status quo is “don’t ask, don’t tell”, where both delegators and validators are left isolated and in the dark on transactions.
  • Ineffective political economy. Imbalanced economics negatively affect politics, creating myopic actors, where everyone pays for a bad system.

We’re seeing large players extract a disproportionate amount of MEV. In other words, a validator oligarchy has emerged, where voting power is accumulated by offering outsized yield, instead of governing the network. Latency wars pay large infrastructure providers better execution, and those costs are extracted from the community.

Thus, extraction is the problem. Left unsolved, the validator set will centralize and the Cosmos vision of sovereign community will not be realized.

Aggregation, not Extraction

To solve, we must zoom out and examine the entire value chain.

The bird’s eye view of the value chain reveals a key insight: user preferences matter and how these users express those preferences matter. The prioritization of user preferences can lead to an additive, not subtractive ecosystem.

We believe block building is a specialized role that every validator deserves equal access to. Consequently, we need to move block production out of the validator and into a competitive builder layer which aggregates value across all participants.

Hence, aggregation is the solution. What’s missing is a mechanism for buyers and sellers of blockspace that leverages aggregation to express complex preferences and avoid the centralizing forces of bad incentives.

Mekatek proposes a new framework for thinking about blockspace markets: Maximum Aggregate Value (MAV). The definition of MAV is the sum of the value created by a heterogenous set of agents in the supply chain.

MAV removes the extractive power of the few, solving the issue of validator oligarchy.

First MAV Market finds Equilibrium

Zenith is the first interchain MAV market. By rewarding actors commensurately with their value creation, Zenith finds equilibrium between buyers and sellers of blockspace, resulting in a more equitable, transparent and decentralized Interchain.

There are three key benefits to Zenith users:

1) Collaboration without collusion — users should not need to create off-chain agreements to execute transactions in accordance with their preference

2) Complete agency — Zenith is an opt-in system that allows heterogenous composability of blockspace

3) Expansion of sovereignty — validators and their delegators are the ultimate governing force of how blockspace is bought and sold

Unified Political Economy

We envision a unified political economy, where the smallest and largest stakeholders collaborate without collusion. Cosmos’ coveted ideals of sovereignty and interoperability can only be realized if we challenge the status quo.

Where we are now

The first version of the market (Zenith) is a centralized, trusted best-effort system. All Cosmos SDK chains have native representation. We currently have partnerships with Validatus , @ChorusOne , @frensvalidator , @binaryholdings , @iqlusion — with many more in the pipeline.

Our future efforts focus on a native, decentralized and trust minimised solution: we call it Pulzaar. Below is a look at our roadmap:

Learn with us

You can read about Zenith works and how to integrate in our documentation here . Available now for Osmosis — soon expanding to Evmos and Juno. We ask you to learn and integrate with us to expand competition for Interchain blockspace.

Contact us at: