Could MetaMask's Secret Project Shake Up Ethereum?

There is a secret project going on over at Meta mask and it could shake up how Ethereum works. I'm intrigued. So joining us right now is deputy managing editor of Tech and Protocols. Sam Kessler. Sam. So nice to see you. Good to see you. It's been a little while. I miss the hash days. We all do. We all know R I pr IP. All right. Tell us, tell us about the secret project, what's going on. Yeah. So Meta Mask, which is um one of the biggest crypto wallets, the biggest crypto wallet by far on Ethereum um is um putting together this secret project where they're changing the way that the app works. So conventionally, um when you're using a crypto wallet and when you're transacting on a Blockchain, more generally, what you do is you submit a transaction. So you want to trade some tokens, you'll go to unis swap, a decentralized exchange or sushi swap, another decentralized exchange and you go to one of these, you choose the, the specific specific exchange you want to go to. You say, hey, I want to sell these tokens. You find the specific price that you're gonna sell those tokens at you don't want to go above this price below this price. You specify a bunch of different things, bless you. You specify a bunch of different things. And then um what you end up doing is um submitting a a transaction um that you know, does what you specified, but now me mask and a bunch of other programs that are kind of following. Um Well, that metamask is more than one following are are switching to this idea of intents where instead of having to submit a specific transaction, what you do is you submit a general intent. The idea like, hey, I just want to sell a token, um get me the best price and then meta mask behind the scenes through some mechanism that they're putting together and that's what this news is about. Um you know, figures out how to route your transaction to get or, you know, route a series of transactions to accomplish what you want to accomplish. Um I know that's like kind of a AAA jumble of a lot of different things, but hopefully that at a high level um explains it. So what does that mean for the end user folks who are interacting with meta mask? Yeah, so I mean, the two big benefits are first user experience. Now, you don't have to, you know, suss out exactly what the best venue is for a given action on a Blockchain. There's a million different ways to do different things and you know, you don't have to do any of that leg work anymore. Um Meta mask can handle it for you in the future as this stuff rolls out. And the second thing for end users. Um So it's user experience, but the second thing is just price um fees. Um you know, all of those things that people are typically mindful of. Meta ma can take care of, they can help you avoid mev bots maximal extractable value. You can look that up. But the idea of people in the Ethereum ecosystem front running your transactions, they'll help you avoid that. They'll help you get the cheapest gas, they'll help you, you know, find the best route for your transaction. Maybe you should arbitrage a bunch of weird ways to get a better price for your tokens. I mean, this is like one example, but there's a bunch of ways where uh uh ostensibly this should help you out, but there's also some risks. I want to talk about the risks in just a second. But how did you find out about this secret? And why is it a secret? Yeah, it's a good question. And the second part, the why is it a secret plays into some of the risk question frankly. But um you know, I found out about it from just Ethereum ecosystem. People who will not be named won't be named. Don't want to be named um who kind of heard about this and for various reasons, you know, just wanted to give me, you know, bits and pieces of it. And then when I went to Meta Mask and I was like, hey, I know Xy and Z um first they were like, hey, no, um you know, please don't, you know, publish this until such and such a time. But, you know, they knew we were going to publish something anyway. And so they were willing to get on the record and the story that we published yesterday and specify the, the some of the um you know, more specific details of the, of the project. And so that's why we know with 100% certainty. Um This is what's happening. OK. Now, before we take this home, tell us about the risks, the challenges that are presented with this. Yeah. So, you know, um I, I've kind of like given the explanation of this at a high level, it's kind of like a black box, right where it's like now I put it in an intent and I say, hey, I want to sell my tokens. I want to do this, I want to do this and then meta mask handles it. What does that mean? What that means is they rely on third parties, a marketplace of third parties who auction against one another through some, you know, complicated mechanism in order to get the privilege to carry your transaction or your series of transactions or figure out what your transactions should be from point A to point B. Now again, that, that's confusing. It sounds like this kind of like a morphus thing. But what really matters at a fundamental level here is that meta mask, the biggest crypto wallet on a theory and behind, you know, so like the Lions share of transactions in decentralized finance on the, the biggest decentralized finance ecosystem is now making a fundamental change to who and how it routes your transactions where now it and at least this mechanism it's routed. Um It's creating has a ton of leeway over how it decides to funnel different transactions from users. So say, and, and I'm not saying this at all, but say meta mass for whatever reason behind the scenes decided that it was going to somehow configure its mechanism to route all trades to unis swap. There's reasons why it would do the opposite of that. But you know, say it decided to do that, that would be a big problem for users. Now, meta mask in this story explains a lot of ways why um you know how this is not centralized, this is not vertical integration, it prevents specifically against the case that I've mentioned right there. But this is something that we'll be taking a look at and the mechanism that they're putting together to assure neutrality is going to be closely scrutinized to avoid the sort of outcomes of, you know, centralized control, monopoly and also regulatory capture the idea of regulators looking at something like this and being like, huh there's a company that in some form or fashion has a big chokehold over where transactions flow in this really valuable ecosystem. Um Yeah, I it's complicated but really important as you're explaining the risks. I know two different stories, two totally different things. I was just thinking about ledger recover and the backlash that they received for that product because of uh centralization. Do you think that once this is launched, we could see similar backlash just from, from users? Yeah. So the Ledger recover case, which is a crypto wallet. Um There was like a bug or not even a bug but a capability in their software where, you know, there was a sort of backdoor situation people could go in and essentially by hacking people in a certain way, get their tokens in a manner that Ledger said it specifically prevented against. This is a little bit different because the code for this theoretically is all going to be public in in um in a way that should prevent against such a surprise. Um But it is similar um from the standpoint that the marketing of this product is going to need to match the way that it works in actual, you know, day to day, you know execution. So if meta s says we're creating this incredibly neutral, credibly, neutral and incredibly neutral platform where anybody can join in it's permissionless. Anybody can carry user, any third party can join to compete with one another to carry user transactions in a way that is, you know, neutral and balanced and so on and so forth. But then we realize that hey, some of these third parties are way more powerful and therefore accrue in the way that this system is constructed. A lot of the power. Again, we're being vague here because we don't have all the details and this market hasn't shaken out yet. But if that ends up happening, that is out of alignment with the marketing. And so people are gonna want to take a close look at it and might be concerned. Sam, thank you very much for joining me and explaining that story to us. I'm sure you'll be watching closely on next development. So we'll have you back on to tell us about the latest updates. Yeah, good to see you, Jen. Thanks for having me. That was deputy managing editor of Tech and Protocols at Coindesk. Sam Kessler.