Cross-Chain MEV is a Negative-Sum Game for Users

Cross-chain MEV is extractive. Every bridge transaction creates a predictable price impact that searchers front-run, capturing value that should belong to the user.

Users subsidize arbitrageurs. The price improvement a user expects from bridging is often captured by MEV bots on the destination chain before their transaction settles.

Protocols like Across and Stargate are the venues, but the economic leakage occurs in the destination chain's mempool via DEX arbitrage.

Evidence: A 2023 study by Chainalysis found that MEV accounted for over $1 billion in extracted value, with cross-chain arbitrage being a primary driver.

Value extraction dominates efficiency. The economic model of most cross-chain bridges and DEX aggregators is predicated on capturing value from user slippage and latency, not minimizing it. This creates a structural conflict where protocol revenue is user loss.

Intent-based architectures like UniswapX shift the burden of execution and routing to third-party solvers, but this merely relocates the MEV, it doesn't eliminate it. The solver's profit is the user's suboptimal price.

Compare Across Protocol to Stargate. Across uses a competition-based model where relayers bid for user intents, theoretically compressing extracted value. Stargate's native liquidity pools create predictable, but often higher, implicit costs through LP fees and slippage.

Evidence: The $1.2B+ MEV extraction on Ethereum L1 in 2023 is a lower bound for cross-chain. Every atomic arbitrage between Uniswap on Arbitrum and Curve on Polygon represents value siphoned from user transactions.

Cross-chain arbitrage is extractive. Searchers exploit price discrepancies between DEXs on different chains, like Uniswap on Ethereum and Trader Joe on Avalanche. The user's swap on the destination chain creates the price impact that the searcher's front-running trade profits from, creating a direct wealth transfer.

Bridging itself is an MEV vector. Bridges like Across and Stargate rely on off-chain relayers who can reorder or censor transactions. This creates a relayer auction where users pay for inclusion, with fees captured by the relayer network instead of the underlying blockchain's validators.

The settlement layer extracts final value. Cross-chain messaging protocols like LayerZero and Wormhole require destination-chain validators to attest to messages. These validators can extract MEV by manipulating the order of inbound transactions that their attestation unlocks, adding a final toll.

Evidence: Research from Chainalysis and Flashbots shows over $1.5B in MEV extracted from bridges and DEX arbitrage in 2023. User losses are not fees; they are value siphoned by the infrastructure's inherent latency and trust gaps.

Arbitrage is parasitic liquidity. It follows price discrepancies created by user transfers, it does not create the initial depth. Protocols like Across and Stargate rely on canonical asset pools, not arbitrageurs, for baseline liquidity.

The liquidity is extractive. The capital deployed by MEV bots is a cost of doing business, recouped from user slippage. This creates a negative-sum transfer from users to sophisticated actors.

Real liquidity is proactive. Market makers on centralized exchanges or Uniswap v3 LPs commit capital ahead of demand. Cross-chain arbitrage is purely reactive, a tax on the system's fragmentation.

Evidence: Research from Chainalysis and Flashbots shows over 90% of cross-chain MEV is simple arbitrage, not complex DEX routing. This is rent-seeking, not value creation.

The problem is structural. Cross-chain MEV is negative-sum because the value extracted from users by searchers and validators exceeds the liquidity and speed benefits provided. This creates a net drain on the ecosystem's total value.

Intent-based architectures are the fix. Protocols like UniswapX and CowSwap demonstrate that solving for user intent, not transaction execution, flips the model. This shifts the competitive landscape from extracting value to competing on fulfillment quality.

Standardization kills arbitrage. Universal standards for cross-chain messaging, like IBC or LayerZero's OFT, reduce fragmentation. This eliminates the informational asymmetries and complex routing that MEV bots exploit for profit.

Evidence: The 2022 Nomad Bridge hack saw over $190M extracted, a catastrophic example of negative-sum MEV where attacker profit directly equaled total user loss, demonstrating the systemic risk.