diff --git a/docs/Developers/payment-methods.md b/docs/Developers/payment-methods.md index dcc79f4..c888127 100644 --- a/docs/Developers/payment-methods.md +++ b/docs/Developers/payment-methods.md @@ -4,47 +4,52 @@ description: Classification of variouus payment methods tags: ["primary market", "validators", "builders", "searchers", "payment"] --- -To further classify the payment methods, we can consider the broader context of Ethereum block building, including both -traditional and MEV-Auction scenarios as it relates to payment mechanisms. +# Classification of Payment Methods in Ethereum Block Building -> This classification covers a range of payment methods from the simplest direct payments to more complex arrangements -> involving smart contracts and off-chain agreements. +To further classify the payment methods, we can consider the broader context of Ethereum block building, including both traditional and MEV-Auction scenarios as it relates to payment mechanisms. -1. Direct Payment Method +> This classification covers a range of payment methods from the simplest direct payments to more complex arrangements involving smart contracts and off-chain agreements. -- **Description**: The most straightforward method where the block proposer (validator) receives the transaction fees - directly from the transactions included in the block. -- **Use Case**: Commonly used in standard Ethereum block building. -2. Coinbase Transfer Payment Method +| **Payment Method** | **Use Case** | **Traditional Scenario** | **MEV Auction Scenario** | +|-----------------------------------------|--------------------------------------------------------------------------------------------------------|--------------------------|--------------------------| +| Direct Payment Method | Commonly used in standard Ethereum block building. | Yes | No | +| Coinbase Transfer Payment Method | Utilized in both traditional and MEV-Auction scenarios. | Yes | Yes | +| Indirect Address Payment (IAP) Method | Specific to MEV-Auction, where builders and proposers are distinct entities. | No | Yes | +| Intermediate Transfer Payment (ITP) Methods | Specific to MEV-Auction, particularly when involving smart contracts or third-party addresses. | No | Yes | +| Smart Contract-Based Payment Method | Useful in decentralized block building scenarios or when complex payment distributions are required. | Yes | Yes | +| Off-Chain Payment Method | Might be used in private agreements between parties involved in block building. | Yes | Yes | -- **Description**: In this method, the transaction fees and MEV rewards are transferred directly to the block - proposer's address via the coinbase transaction. -- **Use Case**: Utilized in both traditional and MEV-Auction scenarios. +### Direct Payment Method -3. Indirect Address Payment (IAP) Method +- **Description**: The most straightforward method where the block proposer (validator) receives the transaction fees directly from the transactions included in the block. +- **Use Case**: Commonly used in standard Ethereum block building. -- **Description**: The builder uses a different address to pay the proposer through an end-of-block transaction, - separate from the address receiving the block’s transaction fees. -- **Use Case**: Specific to MEV-Auction, where builders and proposers are distinct entities. +### Coinbase Transfer Payment Method -4. Intermediate Transfer Payment (ITP) Methods +- **Description**: In this method, the transaction fees and MEV rewards are transferred directly to the block proposer's address via the coinbase transaction. +- **Use Case**: Utilized in both traditional and MEV-Auction scenarios. -- **Description**: Involves a two-step process where the builder first transfers the payment to an intermediary - address, which then sends it to the proposer. -- **Use Case**: Also specific to MEV-Auction, particularly when involving smart contracts or third-party addresses. +### Indirect Address Payment (IAP) Method + +- **Description**: The builder uses a different address to pay the proposer through an end-of-block transaction, separate from the address receiving the block’s transaction fees. +- **Use Case**: Specific to MEV-Auction, where builders and proposers are distinct entities. + +### Intermediate Transfer Payment (ITP) Methods + +- **Description**: Involves a two-step process where the builder first transfers the payment to an intermediary address, which then sends it to the proposer. +- **Use Case**: Also specific to MEV-Auction, particularly when involving smart contracts or third-party addresses. + +### Smart Contract-Based Payment Method -5. Smart Contract-Based Payment Method +- **Description**: Payments are handled through a smart contract, which can programmatically distribute rewards based on predefined rules. +- **Use Case**: Useful in decentralized block building scenarios or when complex payment distributions are required. -- **Description**: Payments are handled through a smart contract, which can programmatically distribute rewards based - on predefined rules. -- **Use Case**: Useful in decentralized block building scenarios or when complex payment distributions are required. +### Off-Chain Payment Method -6. Off-Chain Payment Method +- **Description**: Payment occurs outside the Ethereum blockchain, possibly through other cryptocurrencies or traditional banking systems. +- **Use Case**: Might be used in private agreements between parties involved in block building. -- **Description**: Payment occurs outside the Ethereum blockchain, possibly through other cryptocurrencies or - traditional banking systems. -- **Use Case**: Might be used in private agreements between parties involved in block building. ## Builder Payment Methods