Galaxy Era: Agent-based Simulation of Execution Tickets
Pascal Stichler
TL;DR
Execution Tickets propose a protocol-level mechanism to separate execution rights from consensus rewards in Ethereum, aiming to improve decentralization and capture of MEV while ensuring block-producer incentives. The authors develop a theoretical design-space and four pricing models, then test six concrete configurations via an agent-based simulation across 300+ runs to evaluate decentralization, MEV capture, and price dynamics. Key findings favor a second-price auction with a secondary market for reducing centralization and increasing MEV capture, while non-expiring, non-refundable tickets with longer lookahead improve price predictability and stability. The work provides a foundational framework and a practical ABM implementation for exploring ET configurations, offering insights into balancing MEV capture, decentralization, and operational efficiency, with caveats around multi-block MEV and DSIC/OCA-proofness that warrant further research.
Abstract
Execution Tickets are currently discussed as a next evolutionary step in Ethereum's block space allocation mechanism, separating consensus rewards from execution rewards and selling execution rights through a dedicated market. We present a theoretical framework identifying three core objectives for this mechanism - Decentralization, MEV capture, and Block Producer Incentive Compatibility - alongside practical metrics for evaluating each objective. To meet these goals, we explore seven key design parameters: ticket quantity, expiry, refundability, resalability, enhanced lookahead, pricing mechanism, and target ticket amount. We then evaluate four pricing mechanisms and construct six concrete mechanism designs from these parameters. To assess trade-offs in real-world conditions, we perform an agent-based simulation with over 300 runs. Our findings suggest that auction-driven formats, particularly second-price, excel in capturing significant MEV. The simulation also indicates that offering a secondary market can help alleviate centralization, since specialized ticket holders can enter and exit the market as needed. Non-expiring tickets show promise in reducing valuation risks, as ticket holders are not influenced by expiry-related discounting. Likewise, removing refundability simplifies the mechanism without notably impairing performance. Extended lookahead periods benefit price predictability and smoothness at a slight cost to price accuracy. Overall, this study provides a theoretical framework on the mechanism design space for Execution Tickets as well as a practical implementation of an agent-based simulation to test mechanism design choices. Further, it provides an exploratory evaluation of Execution Ticket mechanism designs, offering insights into optimal configurations that balance MEV capture, decentralization, and operational efficiency in Ethereum's block space allocation.