The Future of MEV: From Dark Forest to Public Narrative

Centralized block builders like Flashbots' mev-boost dominate, creating a new layer of rent-seeking and potential censorship. The ~90% builder market share held by a few entities reintroduces systemic risk.

• Centralized Censorship Vectors: Builders can exclude transactions.
• Value Leakage: Searchers and users pay premiums to centralized intermediaries.
• Inefficient Auction: Off-chain deals lack credible neutrality and finality guarantees.

Protocol-native PBS, as researched for Ethereum, bakes the builder role into the consensus layer with cryptoeconomic slashing. This aligns incentives and prevents censorship at the protocol level.

• Credible Neutrality: Builders commit to blocks via on-chain commitments.
• Reduced Centralization: Opens the builder market to permissionless competition.
• MEV Smoothing: Enables protocol-level redistribution of MEV (e.g., to stakers or a public good fund).

Liquidity takers on DEXs like Uniswap V3 are systematically exploited by sandwich bots, paying ~$200M+ annually in unnecessary slippage. This creates a poor UX and deters adoption.

• Predictable Execution: Public mempools expose user intent.
• Negative-Sum Game: Value is extracted from users, not created for the network.
• Frontrunning Arms Race: Searchers waste hashpower/Gas on zero-sum competition.

Shift from transaction-based to intent-based systems. Users declare what they want, and off-chain solvers compete to fulfill it optimally. This abstracts away complexity and captures MEV for the user.

• MEV Capture for Users: Solvers internalize arbitrage, passing savings back.
• Gasless UX: Users sign intents, solvers pay gas and handle execution.
• Batch Auctions: Protocols like CowSwap use batch auctions to eliminate on-chain frontrunning.

Bridges and cross-chain apps like LayerZero and Axelar create new, unmanaged MEV surfaces. Arbitrageurs exploit price differences across chains, but the value is captured off-chain, offering no security benefits to the destination chain.

• Unsecured Value Leakage: MEV revenue doesn't secure the chain it occurs on.
• Oracle Manipulation Risks: Cross-chain messaging can be frontrun.
• Inefficient Liquidity: Fragmented liquidity pools increase arbitrage opportunities.

Networks like EigenLayer, Espresso, and Astria provide a shared sequencer layer that orders transactions across rollups atomically. This allows MEV to be captured and redistributed at the ecosystem level, improving security and efficiency.

• Atomic Composability: Enforce cross-rollup transaction atomicity.
• MEV Recirculation: Capture value to subsidize rollup security (via restaking) or user fees.
• Fast Finality: Reduce cross-domain latency to ~500ms, shrinking arbitrage windows.

Flashbots' vision to decouple block building from proposing, creating a neutral, decentralized marketplace for MEV.\n- Decentralized Block Building: Separates proposer-builder roles, preventing vertical integration.\n- Intent-Centric Flow: Users express desired outcomes; solvers compete to fulfill them efficiently.\n- Cross-Chain Native: Designed from day one to coordinate MEV across Ethereum, rollups, and alt-L1s.

Today's MEV is captured by specialized bots in private mempools, creating a toxic environment for users and apps.\n- Front-Running & Sandwiching: Directly extracts value from user transactions.\n- Centralizing Force: Reliance on private RPCs like Flashbots Protect concentrates power.\n- Inefficient Markets: Value leaks to intermediaries instead of users or validators.

The new stack makes MEV flows transparent and programmable, enabling redistribution and fairer markets.\n- Order Flow Auctions (OFAs): Apps like CowSwap and UniswapX auction user transactions, capturing MEV for users.\n- MEV-Share & MEV-Boost++: Protocols like Flashbots enable MEV proceeds to be shared back with users.\n- Solver Networks: Solvers (e.g., for Across, CowSwap) compete on execution quality, not just speed.

Applies threshold cryptography to create a sealed-bid environment for transactions, neutralizing front-running.\n- Encrypted Mempool: Transactions are encrypted until the block is proposed.\n- Fair Ordering: Prevents searchers from seeing and exploiting pending transactions.\n- Rollup & App-Chain Focus: Key infrastructure for Optimism, Arbitrum, and sovereign rollups needing credible neutrality.

Provides cryptoeconomic security for the decentralized actors (builders, solvers, sequencers) in the MEV stack.\n- AVS for Builders: Projects like EigenDA can secure decentralized block builder networks.\n- Slashing for Malice: Validators can be slashed for censorship or MEV theft, enforcing protocol rules.\n- Unified Security Layer: Reduces capital costs for new MEV infrastructure, accelerating innovation.

The ultimate goal is to institutionalize MEV capture and redistribution, funding core protocol development.\n- Protocol-Sourced Revenue: MEV can fund Ethereum PBS or Cosmos consumer chains via fees.\n- Transparent Supply Chain: Every actor (user, app, solver, builder, proposer) gets a verifiable share.\n- Credibly Neutral Base Layer: MEV infrastructure becomes a public utility, not a private weapon.

Public mempools are for retail losers. The real MEV, driven by institutional order flow, will always flow to private channels like Flashbots Protect RPC or BloxRoute. This creates a permanent two-tier system where transparency is a tax on the uninformed.\n- >90% of profitable MEV is captured off-chain\n- Public sequencing is a race to zero profit for pros

Narratives of 'fair ordering' are a regulatory honeypot. Defining 'fairness' is subjective and invites OFAC-compliance as a default. Projects like Espresso Systems or Astria become de facto KYC gates for block building.\n- Censorship resistance is sacrificed for legitimacy\n- Builders become regulated financial intermediaries

Intent-based architectures (UniswapX, CowSwap, Across) and SUAVE aim to abstract away complexity. But by hiding the auction, they also kill the competitive price discovery that funds public goods like proposer-builder separation (PBS). The market becomes a black box with monopsony pricing.\n- MEV revenue for validators could plummet >50%\n- Protocol-owned solvers create new central points of failure

Each new L2 rollup (Arbitrum, Optimism, zkSync) fragments liquidity and MEV. Cross-domain MEV is technically daunting, leaving most value trapped. Shared sequencers (like those proposed by Espresso or Astria) add a fragile, centralized coordination layer that becomes the attack surface.\n- >$30B TVL is now siloed across L2s\n- Cross-chain arbitrage remains a niche, high-latency game

Fast finality (e.g., Solana) requires centralized hardware, killing decentralization. Secure finality (e.g., Ethereum) is too slow for complex MEV games. Projects like EigenLayer attempting to re-stake security create systemic contagion risk. There is no free lunch.\n- ~12s finality is too slow for HFT MEV\n- Re-staking creates correlated failure modes

ZK-proofs (e.g., Aztec, Nocturne) for private transactions move MEV from extraction to exclusion. If you can't see it, you can't include it. This shrinks the pie for block builders and validators, potentially making chains less secure. Full privacy could reduce staking yields by ~30%, disincentivizing participation.\n- Private mempools eliminate arbitrage & liquidation opportunities\n- Security budget of the chain is directly undermined