Why Optimism's MEV Approach Risks Recreating Ethereum's Flaws

Sequencer centralization is inevitable under Optimism's current design. The protocol's MEV auction (MEVA) concentrates block-building rights into a single, high-stakes winner-take-all event, creating a massive economic moat for the incumbent. This directly mirrors the proposer-builder separation (PBS) dynamics that entrenched Lido and Flashbots on Ethereum L1.

The 'public good' narrative is a subsidy trap. While a portion of MEV revenue funds retroactive public goods, this creates a perverse incentive to maximize extractable value to justify the subsidy. Protocols like Across Protocol and UniswapX built intent-based systems to minimize MEV, but Optimism's core economics are aligned to maximize it.

Evidence: The first MEV auction on Optimism saw the winning bidder pay over 600 ETH. This capital requirement creates a barrier to entry that only well-funded entities like Flashbots or proprietary trading firms can clear, guaranteeing centralization from day one.

Agnosticism invites exploitation. By not designing a native MEV solution, Optimism's Superchain cedes control to the highest bidder. This replicates Ethereum's core failure: outsourcing public good infrastructure to private, profit-driven actors like Flashbots.

Neutrality is not a strategy. The Superchain's modular design, with shared sequencing via the OP Stack, creates a centralized coordination point. Without a protocol-level MEV policy, this sequencer becomes the single point of failure for value extraction, mirroring Ethereum's validator/miner dilemma.

Compare to proactive frameworks. Chains like Solana with Jito or Cosmos with Skip Protocol bake MEV redistribution into the protocol layer. Optimism's vacuum forces builders to adopt fragmented, application-level solutions, increasing systemic risk and complexity for end-users.

Evidence: The PBS Precedent. Ethereum's Proposer-Builder Separation (PBS) was a reactive fix for an unmanaged problem, leading to builder cartelization. Optimism's current path is a pre-commitment to the same reactive cycle, ensuring MEV capture consolidates before a solution is even proposed.

Sequencer-as-Proposer is flawed. Optimism's MEV auction treats the sequencer like an Ethereum block proposer. This recreates the very centralization pressure PBS was designed to mitigate, concentrating power in a single, privileged actor.

The MEV auction is insufficient. A single auction winner controls all transaction ordering. This creates a monolithic proposer that builders must bribe, unlike Ethereum's distributed validator set where builders compete for many proposers.

Compare to Arbitrum's approach. Arbitrum's permissioned but neutral sequencer avoids this parallel by not monetizing MEV directly. It outsources MEV capture to the L1 via Force Inclusion, pushing complexity up the stack.

Evidence: Builder dominance. On Ethereum, the top three builders control ~70% of blocks. A single sequencer running an MEV auction is a single point of failure for fair ordering, inviting similar cartelization.

Permissionless MEV invites complexity. Optimism's core design allows any proposer to submit a block, but this flexibility creates a race for MEV extraction. This mirrors Ethereum's pre-PBS era, where block builders and proposers were bundled, leading to centralization pressure.

The result is proposer centralization. Without a PBS-like separation, the most sophisticated actors with the best MEV strategies will dominate block production. This recreates the validator centralization problem that Ethereum is actively trying to solve with protocols like EigenLayer and Flashbots SUAVE.

It fragments the ecosystem. Each L2 becomes its own MEV battleground, forcing developers to manage unique sequencer risks and front-running vectors. This is the opposite of the shared security model that makes L2s attractive, adding back the complexity L2s were meant to abstract.

Evidence: The MEV-Boost adoption rate on Ethereum demonstrates the inevitability of this specialization. Over 90% of Ethereum blocks are now built by professional builders, proving that economic forces centralize permissionless roles. Optimism's model guarantees this replay.

Optimism's MEV-Auction centralizes value. The protocol's integrated auction for MEV rights creates a single, privileged revenue stream for sequencers. This replicates the proposer-builder separation (PBS) model's flaws on Ethereum, where block builders like Flashbots capture outsized value. The design incentivizes sequencers to prioritize auction winners, not user experience.

Integrated auctions create extractive markets. Unlike intent-based systems like UniswapX or CowSwap that decentralize execution, a centralized auction is a rent-seeking mechanism. It turns MEV from a network externality into a formalized tax, creating a predictable profit center for the sequencer at the network's expense.

The alternative is protocol-native distribution. Architectures like Arbitrum's time-based ordering or shared sequencer networks (e.g., Espresso, Astria) treat MEV as a public good for redistribution. They use mechanisms like retroactive public goods funding (RPGF) or direct user rebates, aligning sequencer incentives with long-term network health instead of short-term extraction.

Evidence: The PBS Precedent. On Ethereum, PBS concentrated builder power; the top three builders now produce over 80% of blocks. An integrated MEV auction on Optimism risks the same outcome, creating a sequencer monopoly that the protocol itself designed and sanctioned.