Scientists can actually grab Bitcoin NFTs like this?

24-04-12 15:00
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In the past week, more and more friends have asked me this question -


It is obvious that Bitcoin NFT trading markets like Magic Eden are "locked orders", so why did the purchased NFTs not arrive in the end? Checking the purchase transaction shows that the transaction has been replaced and the item has been "grabbed".


The answer is: you have been "RBF".


In fact, this is not an old problem. At the end of November last year, the "OrdiBot" series released on the Magic Eden Launchpad became the first famous victim, and @mulan_art's "Unigraphs" series also immediately delayed its release on the Magic Eden Launchpad because "RBF" could enable any non-whitelisted user to bypass the whitelist mechanism to "jump the gun". Later, Magic Eden made a fix for this problem on its Launchpad. Now, Magic Eden Launchpad whitelist casting no longer needs to worry about being "RBF". (Related reading: White single user Mint was "robbed halfway" by snipers, Ordibots will re-issue airdrops to make up for the losses)


The solution is to mint transactions "Unigraphs"


At the end of last year, someone used 0.0334 bitcoins to "preempt" the transaction of 50 million BRC-20 Token $RATS.



Last month, the first buyer to submit a transaction, cat0673, who has a "golden cape" (which can get a free Taproot Wizard in the future), was also "preempted" by another buyer who paid an additional $180 in mining fees. The buyer who finally made the deal sold it for 1.9 bitcoins.


「Quantum Cat」cat0673


The recent popularity of the Bitcoin ecosystem has caused more and more friends to encounter this problem, and there are more and more discussions. In the early hours of this morning, the editor has been wondering why the Bitcoin network fee rate remains high. Although last night and this morning were a day when many projects were released, looking at the inscriptions on the chain, there were no BRC-20 or small picture projects that were enough to jam the network. Now the editor finally knows why - more than 30% of the mining fees of many blocks are caused by "RBF" sniping...



At this point, you may wonder: As long as you buy it on Magic Eden, no second person can click the buy button on the webpage. How are these "preemptive actions" achieved?


RBF "preemptive" caused by PSBT trading mechanism


First of all, we need to understand that Bitcoin NFT trading markets like Magic Eden use PSBT, which is "Partially Signed Bitcoin Transactions". Simply put, both buyers and sellers sign according to the template containing transaction information provided by the NFT trading market. The seller's signature is completed when the listing is completed, and the buyer's signature is completed when the purchase is submitted. The market then combines the two signatures of the buyer and seller for broadcast. (Related reading: Ordinals founder angrily refutes Yuga Labs auction, why PSBT is the correct answer for Bitcoin NFT transactions?)


But the problem comes after the transaction enters the mempool. When the combined transaction is broadcast, the seller's part of the signature becomes visible to everyone because the transaction enters the mempool. After the seller's signature is exposed, it means that everyone can sign the transaction as the buyer.


In this way, the mempool actually changes from a "memory pool" to a "PVP pool" - because the time interval between the release of two adjacent Bitcoin blocks is often relatively long, after the initial transaction is broadcast, if the "sniper" thinks that "jumping the gun" is profitable, he will use the exposed seller's signature to re-sign a transaction with the buyer as his own, and then use RBF to increase his transaction fee rate. Miners will naturally give priority to packaging transactions with higher miner fees. (In short, RBF is "Replace by Fee", which achieves faster transaction confirmation by paying higher transaction fees)


Of course, “snipers” also have their failures. For example, the “RBF” sniping of NodeMonkes mentioned by @robertjfclarke in March this year, because the F2Pool that mined the block did not allow “full RBF”, the preemptive transaction was not packaged. In the end, the first buyer successfully obtained the NodeMonkes, which was about 60% below the floor price at the time, and successfully flipped half an hour later to gain a profit of 0.2629 bitcoins.



Does Bitcoin “MEV” cause fee estimation to fail?


In fact, the RBF preemption caused by PSBT is the same as the Gas increase on Ethereum. The only difference is that Bitcoin's block confirmation time is longer. On Ethereum, the next block is often released in more than 10 seconds, so everyone knows that it is "rolling". The various concepts on Bitcoin may be a little unfamiliar to everyone for a while. In fact, the final effect of RBF preemption and MEV on Ethereum is still somewhat similar.


If the Bitcoin ecosystem continues to be popular, more and more people will come in to compete for this arbitrage space for assets with good liquidity and market performance. The editor has seen the emergence of projects that specialize in providing sniping tools, such as @goldmine_tools. If this situation really happens, then for the assets that are sought after by everyone, the estimated block fee rate will actually fail to a certain extent. In essence, the transaction becomes an "auction" with a fixed price but a bid for mining fees, and the miners are happy.


RBF History The higher the fee, the miners are actually the beneficiaries


For trading markets like Magic Eden, I think it is just necessary to better let users understand that the process of purchasing NFTs is actually like this, and then optimize the purchase process of NFTs on this basis. For example, provide everyone with an RBF tool, change the current front-end page lock order to "This NFT already has TX Pending", and then allow everyone to pay a higher rate. This is exactly the case with the NFT aggregator on ETH. There will be a pending prompt, but it doesn't matter if you are willing to raise the Gas to grab it.


Conclusion


At the end of writing, I remembered a question that everyone may be concerned about: if it is RBF, will I lose the mining fee and the money for buying things?


No.


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