Future of the RPC Landscape by LlamaNodes

Sep 6, 2023

DeFi DoJo

LlamaNodes

Decentralized Finance is always on the move, and its underlying infrastructure is no different. As the Remote Procedure Call (RPC) landscape evolves to be more public-facing than ever before, its pivotal role between decentralized networks and user interfaces is apparent. The RPC market's dynamism not only shapes the way we interact with blockchain systems but also influences the trajectory of the entire blockchain ecosystem. In this article, we’ll delve into the key RPC trends shaping up for 2024.

With MEV, Privacy, Order Flow Intent, and Aggregation taking the top spots to redefine the RPC market, let’s dive in.

1.RPCs in the MEV Vertical | Add it to the Stack ser…

When operating on a blockchain, seeing transactions before anyone else does is powerful— and profitable. Why does every MEV Team, OFA, Builder, and Searcher seem to be creating their own free RPC endpoints for retail use? Common knowledge would say if it's free, then you (or your transactions) are the product.

As RPC providers attempt to minimize the negative impact of front-running with MEV Protection, they’ve revealed some underlying truths. With order flow visibility and comprehensive data on pending transactions at their fingertips, providers can route, extract value, and order transactions (aka build blocks) to their liking. This isn't necessarily a bad thing, but it can have a negative impact on users and TX outcomes, like this friend.tech example.

Giving retail users a choice, being transparent on how TXs are handled per endpoint, and ideally sharing a piece of the pie is likely the best outcome for all. RPC services that empower users to make informed decisions and mitigate the risk are on the cusp– while simultaneously contributing to a fairer and more transparent blockchain environment.

Takeaway: If your RPC provider isn't telling you what they’re doing with your order flow, it's probably being sold or taken advantage of - if not now, soon enough. User choice is a crucial next phase, and it hinges on transparency.

2. Order Flow Intent | User choice

As a user, do you want your trade to gain the maximum amount of money even if you get sandwiched in the process, or do you want your NFT mint to be submitted as fast as possible, regardless of financial implications? Welcome to a world where users can choose based on specific RPC types or intents. Knowing the intent of your order, the ideal outcome, and having an RPC type that suits your needs is coming, along with retail UXs to accompany them.

Takeaway: Granular user choice is the only way to provide equability in the dark forest, anon…

3. RPC UX Prominence | An RPC User Interface?

As retail RPC features improve, so too will the user interface. This growth is driving innovation in areas such as user experience, scalability, and customization. RPC providers and MEV Teams are actively investing in creating intuitive interfaces, reducing latency, and offering tailored solutions to meet the unique demands of different blockchain projects.

Takeaway: You won’t even open MetaMask's settings tab anymore, noob. Just click and shoot.

4. RPC Aggregation | Transcendence Ser..

Don't rely on one, rely on many? Not one DEX, but many dexes = DEX Aggregators? The same applies to RPC aggregation. The idea came about in 2022; is being built out in 2023; will gain prominence in 2024; and will continue to grow in years to come. If executed correctly, this has some substantial benefits, including better redundancy, latency, and scalability. Unique challenges to make this all work seamlessly include the unification of method types and pricing standards across providers, but progress is happening faster than we’ve seen before.

Takeaway: Many are better than one if done well.

5. RPC Privacy | Instrumental for an Agnostic Infrastructure Layer

As we saw with Infura in November 2022, RPC providers' handling of user information is crucial. As privacy is slowly being stripped from every element of DeFi, RPCs are some of the last bastions of hope to keep our industry as THE international layer of trust and neutrality.

You don’t need much imagination to see the trajectory of Infura’s decision, which will likely see it become a censorship mechanism in the not-so-distant future. RPC providers that do not collect PII, IP addresses, etc., will become even more crucial. While its pertinence has faded, we expect to see this as a growing and necessary trend in the marketplace from both B2B (dApps) and B2C (retail) demographics.

Takeaway: The provider can be decentralized in nature but still collect user information, so software needs to be open-sourced to provide transparency to end-users. Only a small handful of providers in the space are fully open-sourced with a complimentary privacy policy; you can find some examples on Chainlist.org with green checkmarks.

Looking Ahead: An Evolving RPC Frontier

We’ve taken the optimistic route here at LlamaNodes and are now building these 5 features into Llamanodes.com RPCs to enhance privacy, greater decentralization, improved transparency, and end-user autonomy. In the grand tapestry of blockchain evolution, the RPC market is a thread that binds users and networks. Its prominence and impact in DeFi ethos will only be amplified as the tapestry grows..

Yours truly,
The Llamas