MEV is now multi-chain. The single-chain MEV game of Ethereum L1 is obsolete. Searchers must now arbitrage across Arbitrum, Optimism, and Base, navigating fragmented liquidity and latency.
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The Future of MEV in a Fragmented Execution Layer
The modular thesis fragments execution. This doesn't kill MEV; it creates new, complex vectors for extraction via shared sequencer networks and cross-rollup arbitrage, demanding new infrastructure and strategies.
introduction
THE FRAGMENTATION
Introduction
The proliferation of rollups and L2s has fractured execution, creating a new, more complex MEV landscape.
Cross-domain MEV dominates value. The largest opportunities are no longer on a single chain. Profits shift to cross-rollup arbitrage and bridge exploitation, protocols like Across and Stargate becoming central attack surfaces.
Fragmentation creates new risks. Isolated sequencers on chains like zkSync and Starknet create localized monopoly power. This risks worse censorship and value extraction than the transparent, competitive L1 mempool.
key-trends
FRAGMENTED EXECUTION
Executive Summary: The New MEV Landscape
The rise of L2s, app-chains, and parallelized execution shatters the monolithic block builder model, creating new MEV vectors and forcing a strategic pivot.
01
The Problem: Cross-Domain MEV is the New Frontier
Arbitrage and liquidation opportunities now span Ethereum L1, Arbitrum, Optimism, and Base. The latency and complexity of multi-domain execution creates a winner-take-most market for sophisticated searchers, fragmenting liquidity and user experience.\n- New Attack Surface: Time-bandit attacks and cross-domain reorgs become possible.\n- Inefficiency: Value leaks between domains due to slow, uncoordinated bridging.
10+
Domains
~500ms
Latency Gap
02
The Solution: Shared Sequencing & Intents
Networks like Espresso, Astria, and Shared Sequencer pools abstract execution ordering across rollups. This enables atomic cross-rollup bundles and fair ordering. Paired with intent-based architectures (UniswapX, CowSwap), users express outcomes, not transactions, neutralizing frontrunning.\n- Atomic Composability: Guarantee execution across multiple L2s in one block.\n- User Sovereignty: Intents move risk from users to solvers, improving UX.
0
Frontrunning
1-Tx
Cross-Chain
03
The Problem: Proposer-Builder Separation (PBS) is Incomplete
On L1, PBS via mev-boost centralizes power in a few builder pools (e.g., Flashbots, bloXroute). On L2s, centralized sequencers are the ultimate MEV cartel, capturing all value. This recreates the trusted intermediary problem crypto was meant to solve.\n- Centralization Risk: >80% of Ethereum blocks are built by 3 entities.\n- Opaque Auctions: Users cannot verify if they received optimal execution.
>80%
Builder Share
1
L2 Sequencer
04
The Solution: Encrypted Mempools & SUAVE
Encrypted mempool protocols (Shutter Network) hide transaction content until inclusion, preventing frontrunning. Flashbots' SUAVE aims to be a decentralized, cross-chain block builder and preferential mempool, creating a competitive market for execution.\n- Transaction Privacy: Content is hidden until block publication.\n- Market Efficiency: Decentralized builders compete on execution quality, not exclusivity.
100%
Encrypted
Multi-Chain
Scope
05
The Problem: MEV is a Protocol Design Flaw
MEV isn't just extracted; it's created by poor application logic. NFT marketplaces with discrete price updates, lending protocols with public liquidations, and DEXes with on-chain order books are MEV printers. This tax is ultimately paid by end-users in worse prices.\n- Structural Leakage: Inefficient designs create predictable, extractable value.\n- Protocol vs. User: Value accrues to searchers, not the protocol or its users.
$1B+
Annual Extract
End-User
Pays
06
The Solution: MEV-Aware Protocol Design
Next-gen protocols bake MEV resistance into their core mechanics. This includes batch auctions (CowSwap), threshold encryption (Shutter), and FBA (Frequent Batch Auctions). The goal is to make extraction impossible or redistributable back to users via MEV capture or rebates.\n- Value Redistribution: MEV is captured by the protocol's treasury or liquidity providers.\n- Design-First: MEV consideration is a primary requirement, not an afterthought.
100%
Redistributed
0
Leakage
thesis-statement
THE EXECUTION LAYER
Core Thesis: The Slippery Slope of Fragmentation
Fragmentation across rollups and L2s will not eliminate MEV but will instead create a more complex, opaque, and potentially extractive market for it.
Fragmentation obfuscates MEV, it doesn't destroy it. The promise of a single, fair, and transparent mempool disappears when activity spreads across Arbitrum, Optimism, and Base. Each chain becomes its own isolated market with unique searcher-builder dynamics, making cross-domain MEV the new high-stakes game.
Cross-domain MEV is the new frontier. Searchers will exploit price discrepancies between Uniswap on Arbitrum and Aave on Optimism, requiring sophisticated intent-based bridges like Across or LayerZero. This creates a meta-game where the bridge's execution logic becomes a new MEV extraction point.
Centralization pressure intensifies. Building a competitive cross-chain searcher operation requires capital and access to proprietary data across dozens of chains. This favors large, institutional players like Flashbots, creating a builder oligopoly that controls the fragmented execution layer.
Evidence: The rise of shared sequencers like Espresso and Astria proves the market recognizes this problem. Their entire value proposition is re-coordinating execution across rollups to capture and potentially redistribute this cross-domain MEV value.
EXECUTION LAYER ARCHITECTURE
MEV Vector Comparison: Monolithic vs. Fragmented Future
Compares MEV dynamics and infrastructure requirements across a single-chain monolithic model versus a multi-chain, modular future.
| MEV Vector / Metric | Monolithic L1 (e.g., Ethereum Pre-Danksharding) | Fragmented L2s (e.g., Arbitrum, Optimism) | Shared Sequencing Layer (e.g., Espresso, Astria) |
|---|---|---|---|
Atomic Arbitrage Surface | Single state, maximal | Fragmented across 10+ chains | Cross-rollup via shared sequencer |
Proposer-Builder Separation (PBS) Viability | Native via mev-boost | Per-rollup implementation, often absent | Enforced at the sequencing layer |
Cross-Domain MEV Capture | Not applicable | Requires 3rd-party bridges (Across, LayerZero) | Native atomic inclusion in shared block |
Time-to-Finality for MEV | ~12 minutes (Ethereum) | ~1-5 minutes (Optimistic) / ~5 seconds (ZK) | < 1 second for pre-confirmations |
Searcher Infrastructure Cost | High (specialized nodes) | Very High (nodes per chain + bridging) | Consolidated (single point of access) |
MEV Revenue Redistribution | Possible via PBS & MEV-Burn | Captured by individual sequencer | Programmable via sequencing rules |
Frontrunning Risk for Users | High (public mempool) | Variable (some have private RPCs) | Mitigated by encrypted mempools |
deep-dive
THE FRAGMENTED LANDSCAPE
Deep Dive: The Two New Frontiers of Extraction
MEV extraction is evolving from a single-chain game into a cross-chain and cross-rollup competition for atomic value.
Cross-domain MEV is inevitable. The fragmentation of execution across rollups and L1s creates latency and price differentials. Searchers now compete to atomically capture value across chains like Ethereum, Arbitrum, and Optimism using bridges like Across and Stargate.
Intents are the new transaction. Users submit signed preference statements, not raw transactions. Protocols like UniswapX and CowSwap solve these intents off-chain, fundamentally changing the searcher's role from frontrunner to solver.
The solver market centralizes. The computational complexity of solving intents across fragmented liquidity favors specialized, well-capitalized actors. This creates a new centralization vector distinct from validator-level PBS.
Evidence: Over 60% of cross-chain volume on major bridges like LayerZero and Wormhole is now arbitrage-driven, creating a multi-million dollar weekly market for cross-domain MEV.
risk-analysis
THE FRAGMENTED EXECUTION LAYER
The Bear Case: Risks & Centralization Vectors
As execution fragments across rollups, appchains, and L2s, MEV's nature and risks evolve, creating new attack surfaces and centralization pressures.
01
The Cross-Domain MEV Cartel
Dominant searchers and builders on Ethereum L1 can leverage their capital and infrastructure to dominate nascent rollup sequencer markets, replicating centralization.\n- Vertical Integration: A builder like Flashbots could operate sequencers on major L2s, creating a cross-chain cartel.\n- Data Advantage: Access to L1 mempool provides superior cross-domain arbitrage signals, crowding out smaller players.
>60%
Sequencer Share Risk
1-2
Dominant Cartels
02
The Intents-Based Centralization Trap
Solving UX with intents (e.g., UniswapX, CowSwap) outsources complexity to centralized 'solvers', creating new trusted intermediaries.\n- Solver Oligopoly: Market converges to 2-3 major solver networks (e.g., Across, Anoma-based) due to capital and data requirements.\n- Opaque Execution: Users trade MEV extraction transparency for convenience, losing verifiable best execution.
~95%
Intent Fill Rate
Opaque
Execution
03
Interoperability Protocol Capture
Bridges and messaging layers (LayerZero, Axelar, Chainlink CCIP) become critical MEV chokepoints, incentivizing validator/staker centralization.\n- MEV-Accelerated Staking: Node operators are selected based on ability to capture cross-chain arbitrage, not just security.\n- Protocol Fee Extraction: Bridge sequencers can embed fees for cross-domain bundle ordering, a new rent-seeking vector.
$1B+
Daily Bridge Volume
Critical
Chokepoint
04
The L2 Sequencer Monopoly Problem
Most rollups use a single, centralized sequencer for speed, creating a de facto MEV monopoly and censorship capability.\n- Total Transaction Ordering Control: The sequencer has 100% power over block building and frontrunning.\n- Weak Economic Security: Staked amounts (e.g., ~$2M) are trivial versus extracted MEV, offering little slashing deterrence.
100%
Ordering Power
~$2M
Avg Stake
05
Fragmented Liquidity & Latency Arms Race
MEV spreads across hundreds of chains, but liquidity and arbitrage capital concentrate with players who can afford ultra-low-latency infrastructure everywhere.\n- Barrier to Entry: Requires global server fleet, proprietary data feeds, and $10M+ in deployed capital.\n- Winner-Take-Most: The latency advantage compounds, leading to >80% of cross-domain arbitrage captured by top 5 firms.
<100ms
Latency Edge
>80%
Arbitrage Capture
06
Regulatory Attack Surface Expansion
Fragmentation turns every cross-chain transaction into a regulatory event, exposing relayers, sequencers, and solvers to KYC/AML demands.\n- Intermediary Liability: Entities like Circle (CCTP) or LayerZero relayers become regulated 'money transmitters'.\n- Compliance MEV: Actors with regulatory licenses gain exclusive access to profitable cross-border flows.
Global
Jurisdictional Risk
Licensed
Advantage
future-outlook
THE EXECUTION LAYER
Future Outlook: The Infrastructure Arms Race
MEV's evolution will be dictated by the fragmentation of execution across rollups, L2s, and specialized chains.
Fragmentation creates new MEV surfaces. Rollup sequencers and L2 validators become the new extractors, capturing value previously reserved for Ethereum proposers. This shifts the economic and security model for chains like Arbitrum and Optimism.
Cross-domain MEV is the next frontier. Searchers will arbitrage assets between rollups and L1, requiring new infrastructure like shared sequencers (Espresso, Astria) and intent-based bridges (Across, LayerZero).
The endgame is programmable MEV. Protocols like SUAVE aim to create a neutral, decentralized marketplace for block building across all execution layers, commoditizing the extraction process itself.
Evidence: Flashbots' SUAVE testnet processes over 100k intents daily, demonstrating demand for cross-chain MEV infrastructure before mass rollup adoption.
takeaways
EXECUTION LAYER FRAGMENTATION
TL;DR for Builders and Investors
The rise of L2s, app-chains, and alt-L1s has fragmented liquidity and execution, creating new MEV supply chains and attack surfaces.
01
The Problem: Cross-Domain MEV is a Mess
Atomic arbitrage across Ethereum, Arbitrum, and Optimism is a $100M+ annual opportunity but is currently a manual, risky game for searchers.\n- Fragmented Liquidity: Searchers must manage capital and state across 10+ environments.\n- Settlement Risk: Failed cross-chain bundles due to latency or reorgs destroy profitability.
10+
Domains
$100M+
Annual Opp.
02
The Solution: Intents & Shared Sequencing
Shift from transaction-based to outcome-based execution. Users submit intents ("swap X for Y at best rate"), and a network of solvers competes to fulfill them across domains.\n- UniswapX & CowSwap: Already proving the model for intents within a single domain.\n- Shared Sequencers (e.g., Espresso, Astria): Provide a neutral, cross-rollup ordering layer, creating a unified MEV market and enabling secure cross-domain bundles.
~500ms
Latency Target
-90%
User Gas Complexity
03
The New Stack: MEV-Share, SUAVE, and LayerZero
Infrastructure is emerging to democratize and secure the cross-chain MEV supply chain.\n- MEV-Share Protocol: Allows users to selectively reveal transaction flow to searchers for a cut, extending to cross-chain.\n- SUAVE Chain: A dedicated mempool and executor chain aiming to be the central marketplace for preference expression.\n- LayerZero & Across: Enable generalized cross-chain messaging, the plumbing for intent fulfillment and secure settlement.
1 Chain
Specialized (SUAVE)
Unified
Mempool
04
The Investor Lens: Vertical Integration Wins
Winning teams will own the full stack: sequencing, solver network, and cross-chain messaging.\n- Protocols as Market Makers: LPs evolve into intent solvers (see UniswapX).\n- Rollup Stack Value Capture: The entity controlling the shared sequencer captures the base layer of cross-domain MEV.\n- Valuation Driver: MEV revenue will shift from opaque searcher profits to transparent protocol treasury fees.
>50%
Revenue Shift
Vertical
Integration
05
The Builder Mandate: Privacy by Default
Fragmentation exacerbates frontrunning. Encrypted mempools and commit-reveal schemes are no longer optional.\n- Shutter Network: Uses threshold cryptography to encrypt transactions until they are ordered.\n- FHE (Fully Homomorphic Encryption): The endgame for private computation on public chains (e.g., Fhenix).\n- Without this, cross-chain intents are a honeypot for generalized frontrunners.
Threshold
Encryption
Essential
For Intents
06
The Endgame: MEV as a Regulated Utility
The most extractable MEV (e.g., CEX-DEX arbitrage) will become a low-margin, commoditized public good.\n- Proposer-Builder Separation (PBS): Becomes cross-chain, enforced by protocol.\n- MEV Smoothing / Redistribution: Protocols like CowSwap already redistribute surplus; this becomes a standard feature.\n- Compliance: Identifiable, auction-based MEV flows are easier to tax and audit, attracting institutional liquidity.
Public Good
Commoditized MEV
Institutional
Compliance
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