Free 30-min Web3 Consultation
Book Consultation
Smart Contract Security Audits
View Audit Services
Custom DeFi Protocol Development
Explore DeFi
Full-Stack Web3 dApp Development
View App Services
Free 30-min Web3 Consultation
Book Consultation
Smart Contract Security Audits
View Audit Services
Custom DeFi Protocol Development
Explore DeFi
Full-Stack Web3 dApp Development
View App Services
Free 30-min Web3 Consultation
Book Consultation
Smart Contract Security Audits
View Audit Services
Custom DeFi Protocol Development
Explore DeFi
Full-Stack Web3 dApp Development
View App Services
Free 30-min Web3 Consultation
Book Consultation
Smart Contract Security Audits
View Audit Services
Custom DeFi Protocol Development
Explore DeFi
Full-Stack Web3 dApp Development
View App Services
the-state-of-web3-education-and-onboarding
Blog

The Future of Negative Results is Valuable On-Chain Data

The $28B annual waste in redundant research is a coordination failure. On-chain data repositories with tokenized incentives can monetize failure, creating a public good that accelerates collective scientific progress.

introduction
THE DATA

Introduction

Failed transactions and abandoned intents are becoming the most valuable on-chain data for optimizing infrastructure.

Negative results are high-signal data. Every reverted transaction, failed MEV bundle, and expired intent in UniswapX or CowSwap reveals a precise boundary condition for network performance and user demand.

Infrastructure is optimized at its breaking point. Analyzing failed cross-chain messages from LayerZero or Axelar exposes latency and cost thresholds more accurately than successful transactions.

Evidence: EigenLayer's restaking model monetizes security slack; the next frontier monetizes data slack from failed operations to build predictive systems.

thesis-statement
THE DATA

The Core Argument: Failure is a Network Good

Failed transactions and reverted smart contract calls generate the most valuable, underutilized data layer for optimizing blockchain infrastructure.

Failed transactions are high-fidelity signals. A reverted call on Uniswap V3 reveals precise slippage tolerance, gas price sensitivity, and MEV vulnerability for that specific user and asset pair. This is more valuable than successful transaction data.

Aggregated failure data creates a public good. Protocols like Gelato and Biconomy can use this data to build smarter gas estimators and more resilient relay services, directly lowering costs for all users.

This inverts the traditional data model. Web2 platforms like Google hoard 404 error logs. On-chain, every failed intent from Across to LayerZero is a public, verifiable data point for network optimization.

Evidence: Over 10% of Ethereum transactions fail. Capturing and structuring this data feed will become a core primitive, akin to how The Graph indexes successful events.

THE DATA GAP

The Cost of Silence: Quantifying Research Waste

Comparing the economic and informational impact of publishing only successful research versus a full dataset including negative results.

Metric / FeatureTraditional Model (Success-Only)On-Chin Negative Results LedgerIdeal State (Full Transparency)

Publication Rate of Experiments

~20% (Positive Bias)

~95% (All Verifiable Trials)

100% (All Activity)

Estimated Annual Wasted R&D Capital (DeFi)

$50M - $150M (Unreported Failures)

$0 (Capital Loss Recorded)

$0 (Capital Loss Recorded & Analyzed)

Time to Detect Protocol Flaw

Weeks to Months (Anecdotal)

< 24 Hours (On-Chain Proof)

< 1 Hour (With Incentivized Reporting)

Data Utility for Risk Models

Low (Survivorship Bias)

High (Full Failure Distribution)

Maximum (Real-Time, Categorized Feed)

Incentive for Honest Reporting

Negative (Career Risk)

Positive (Token Rewards, Reputation)

Aligned (Automated, Programmable Bounties)

Auditability of Research Process

❌

âś… (Immutable Proof-of-Failure)

âś… (With ZK-Proofs of Method)

Avg. Cost to Replicate Failed Study

$10k+ (Re-run from scratch)

$< 100 (Query & Verify On-Chain)

$0 (Fork & Iterate On-Chain State)

deep-dive
THE DATA

Mechanism Design: Incentivizing the Unpublishable

Blockchains will monetize failed transactions and negative results, creating a new market for verifiable execution data.

Failed transactions are valuable data. A reverted call reveals gas costs, slippage, and contract logic flaws. Protocols like EigenLayer and Espresso Systems already treat restaking and sequencing data as an asset class.

Negative results create a proof-of-work. Proving a trade was unprofitable or a bridge route was congested has verifiable economic value. This inverts the traditional publish-or-perish model of academic research.

On-chain oracles will broker this data. Services like Pyth Network and Chainlink Functions will evolve to ingest and attest to negative state proofs. Their role shifts from price feeds to execution feasibility attestations.

Evidence: The MEV supply chain, from Flashbots to Jito Labs, proves that even failed bundle bids generate revenue for searchers and validators through information asymmetry.

protocol-spotlight
NEGATIVE RESULTS AS A PUBLIC GOOD

Protocols Building the Foundry of Failure

The next wave of infrastructure monetizes the data of what doesn't work, turning failed transactions, arbitrage losses, and reverted MEV into a strategic asset.

01

MEV-Share: The Failure Marketplace

Flashbots' MEV-Share creates a market for failed execution paths. By exposing failed bundle intents, it allows searchers to bid on alternative strategies, turning wasted gas into a revenue stream for users and builders.\n- Monetizes Reverted Txns: Failed arbitrage attempts become data points for competing searchers.\n- Privacy-Preserving: Uses SUAVE principles to reveal intent without exposing full strategy.

$100M+
Failed MEV Value
0.5 ETH
Avg. Searcher Bid
02

EigenLayer: Slashing as a Data Feed

EigenLayer's cryptoeconomic security model generates high-value failure data through slashing events. Each slash is a verified on-chain signal of a node operator's faulty behavior, creating a trustless reputation system.\n- Verifiable Fault Proofs: Slashing data feeds directly into AVSs like EigenDA and AltLayer.\n- Reputation Oracle: Failed performance becomes a quantifiable risk metric for restakers.

>4M ETH
At Risk of Slash
100%
On-Chain Verifiability
03

Chainlink Functions & CCIP: The Oracle of Reversion

Oracle calls that revert or return outlier data are critical for smart contract robustness. Chainlink's decentralized oracle networks (DONs) provide a canonical record of API failures and cross-chain message delivery faults.\n- Failure Consensus: Multiple nodes must agree an external API call failed.\n- Cross-Chain Fault Logs: CCIP provides attestations for failed interop messages, crucial for protocols like Synthetix and Aave.

~100ms
Failure Detection
10+
Node Consensus
04

The Graph: Indexing the Graveyard

Subgraphs that track failed transactions, reverted DeFi swaps, and exhausted liquidity pools create a searchable database of negative outcomes. This is foundational for risk engines and on-chain analytics platforms.\n- Historical Failure Patterns: Enables analysis of common revert reasons across protocols like Uniswap and Compound.\n- Real-Time Alerting: Substreams can trigger alerts for systemic failure conditions.

1B+
Txns Indexed
-99%
Query Cost vs. RPC
05

SUAVE: The Centralized Sequencer Failure

SUAVE is a bet that today's centralized sequencers (like those on Arbitrum and Optimism) are a point of failure. It proposes a decentralized, specialized chain for preference expression and execution, making sequencer censorship a measurable on-chain event.\n- Decentralizes MEV Flow: Removes the sequencer as a single point of rent extraction and failure.\n- Creates Failure Transparency: Censorship attempts become public and attributable.

~12s
Time to Finality
100%
Execution Privacy
06

Gauntlet & Chaos Labs: Simulating Catastrophe

These risk management platforms generate synthetic failure data through agent-based simulations. They stress-test protocols like Aave and Compound under extreme market conditions, creating valuable datasets on near-failures that never hit mainnet.\n- Synthetic Stress Tests: Model $10B+ of potential liquidations under black swan events.\n- Parameter Optimization: Data drives governance proposals to adjust collateral factors and liquidation thresholds.

$50B+
TVL Protected
10,000+
Simulations/Day
counter-argument
THE DATA

Counterpoint: Isn't This Just a Database?

The value of negative results is not in the data itself, but in its verifiable, permissionless, and composable nature.

Blockchains are verifiable state machines. A database stores data; a blockchain proves the history and integrity of that data. The negative result of a failed MEV arbitrage is a cryptographic proof that a specific opportunity did not exist, which is a more valuable signal than a simple database entry.

Permissionless composability creates network effects. On-chain data from EigenLayer or Ethereum attestations is a public good. Any protocol, like a Chainlink oracle or a UniswapX solver, can build atop this data without negotiating API access, creating emergent use cases a siloed database cannot.

The market prices verifiability. Projects like The Graph and Covalent index on-chain data, but their value proposition is the cryptographic proof of provenance. A database of failed transactions is worthless; a verifiable log of them, signed by the consensus of thousands of nodes, is a new asset class.

risk-analysis
DATA QUALITY & INCENTIVES

The Bear Case: Why This Fails

The thesis that negative results are valuable on-chain data fails if the data is unverifiable, unprofitable, or unactionable.

01

The Oracle Problem for Failure

Who defines and attests to a 'failure'? On-chain execution is binary, but real-world R&D failure is nuanced. A protocol claiming to sell 'failed experiment data' faces the same oracle trust issues as Chainlink or Pyth, but for subjective, off-chain events.\n- Verification Gap: Was it a genuine experiment or just garbage data?\n- Sybil Risk: Entities could spam 'failures' to earn tokens or fees.

0
Native Verifiers
High
Trust Assumption
02

No Natural Liquidity for Negative Alpha

Financial markets price positive alpha (profitable strategies). Who pays for proven losing strategies? The market is inherently smaller and more skeptical. Projects like UMA or Augur for prediction markets struggle with niche, low-liquidity outcomes.\n- Adverse Selection: Only the worst failures get listed, scaring buyers.\n- Low TVL Trap: Without $100M+ in dedicated capital, data becomes stale and worthless.

<$10M
Niche Market Cap
High
Adverse Selection
03

The Replication Paradox

If a 'failed' method is truly valuable (e.g., a smart contract exploit path to avoid), publishing it on-chain makes it public. This destroys its exclusive value and creates a public good funding problem akin to Gitcoin Grants.\n- Free-Rider Problem: Everyone benefits, few pay.\n- Value Decay: Data's utility decays to near-zero ~immediately after publication.

~0s
Value Decay Time
Public Good
Funding Model
04

Legal Liability On-Chain

Publishing a detailed failure—especially in regulated domains like biotech or finance—on an immutable ledger is a legal nightmare. It's evidence of negligence or IP disclosure. Arweave's permanence conflicts with GDPR 'right to be forgotten' and corporate secrecy.\n- Immutable Liability: Can't delete incriminating or negligent data.\n- Regulatory Wall: HIPAA, SEC rules block sensitive data on public chains.

Permanent
Liability Record
High
Compliance Risk
05

Data Dumping Grounds

Without curation, a 'failure data' blockchain becomes a Filecoin for garbage—a decentralized landfill. The signal-to-noise ratio plummets, requiring centralized arbiters or complex DAO governance, recreating the very systems crypto aims to bypass.\n- No Default Quality: 99%+ of submissions could be useless noise.\n- Curation Cost: Requires $Ms in manual or algorithmic review, killing margins.

>99%
Noise Ratio
$M+
Curation Cost
06

Misaligned Incentive Flywheel

Token incentives to submit failures create perverse outcomes. Like Olympus DAO's (3,3), it becomes a game to farm tokens for data, not to provide genuine value. The system rewards quantity, not quality, leading to collapse.\n- Inflationary Spiral: Token rewards dilute value of the data asset itself.\n- Ponzi Dynamics: Requires perpetual new buyers of data to sustain token price.

Negative
Flywheel
Ponzi
Token Model Risk
future-outlook
THE NEGATIVE RESULT

Future Outlook: The Dataset as a First-Class Citizen

Failed transactions and abandoned intents will become the most valuable on-chain dataset for optimizing infrastructure.

Negative results are high-signal data. Failed transactions reveal precise gas price ceilings, contract vulnerabilities, and MEV attack surfaces. Protocols like UniswapX and CowSwap already analyze failed intents to refine their solvers and improve fill rates.

This data monetizes infrastructure waste. Every reverted call is a paid-for experiment. Services like Blocknative and EigenLayer will index this data to offer predictive gas APIs and attester slashing condition analysis, turning noise into a revenue stream.

The dataset enables intent-centric design. By studying failed user intents, cross-chain systems like Across and LayerZero optimize pathfinding and liquidity allocation. The future bridge doesn't just move assets; it learns from every dead-end.

takeaways
THE DATA PARADIGM SHIFT

TL;DR: Key Takeaways for Builders & Investors

Negative results—failed transactions, arbitrage losses, and MEV extraction—are the new alpha, transforming on-chain data from a passive ledger into an active intelligence layer.

01

The Problem: Wasted Alpha in Failed Transactions

Every failed transaction reveals a market inefficiency, but this data is discarded. This represents a ~$100M+ annual opportunity in unrealized strategy refinement and risk modeling.\n- Key Benefit 1: Enables predictive models to pre-empt gas waste and front-run failures.\n- Key Benefit 2: Creates a new data primitive for on-chain credit scoring and protocol health.

~30%
TX Fail Rate
$100M+
Annual Waste
02

The Solution: Intent-Based Systems as Data Oracles

Protocols like UniswapX, CowSwap, and Across don't just solve MEV; they generate a canonical feed of failed arbitrage and optimal routing paths.\n- Key Benefit 1: Provides a real-time map of liquidity gaps and cross-chain price discrepancies.\n- Key Benefit 2: This data feed is a defensible moat, more valuable than the execution fee itself.

10x
Data Density
-90%
User Slippage
03

The Investment: MEV Infrastructure is Data Infrastructure

Firms like Flashbots and protocols like EigenLayer are not just building for searchers; they are constructing the Bloomberg Terminal for blockchain state.\n- Key Benefit 1: >50% of Ethereum blocks are Flashbots-built, making it the most authoritative source of negative-result data.\n- Key Benefit 2: Restaking secures this data layer, creating a trillion-dollar slashing market for data integrity.

>50%
Block Share
$1T+
Security Pool
04

The New Primitive: On-Chain Reputation Scores

Negative-result data enables trustless reputation. A wallet's history of failed arbitrage or successful liquidations becomes a public, verifiable credit score.\n- Key Benefit 1: Enables undercollateralized lending and sophisticated DeFi positions without KYC.\n- Key Benefit 2: Creates a new attack surface: reputation farming, which itself generates valuable data.

0
Collateral Needed
100%
On-Chain
05

The Architecture: Dedicated Co-Processors for Failure

Just as Ethereum uses L2s for scale, it needs dedicated chains (e.g., Solana for speed, Monad for parallel execution) to simulate and index failure states at scale.\n- Key Benefit 1: Offloads intensive failure-path simulation, reducing mainnet load by ~20%.\n- Key Benefit 2: Creates a standardized API for 'what-if' analysis across the entire ecosystem.

~20%
Load Reduced
~500ms
Simulation Speed
06

The Moonshot: Failure Derivatives & Data DAOs

The logical endgame is financializing negative results. Data DAOs (e.g., Ocean Protocol) will tokenize and sell failure datasets, while prediction markets hedge against systemic transaction failure.\n- Key Benefit 1: Unlocks a $10B+ market for niche, high-value on-chain data feeds.\n- Key Benefit 2: Creates systemic stability by allowing protocols to hedge their own operational risk on-chain.

$10B+
Market Potential
24/7
Risk Hedging
ENQUIRY

Get In Touch
today.

Our experts will offer a free quote and a 30min call to discuss your project.

NDA Protected
24h Response
Directly to Engineering Team
10+
Protocols Shipped
$20M+
TVL Overall
NDA Protected Directly to Engineering Team