The Future of MEV: When Extractable Value Becomes Destructive

Value extraction has shifted from opportunistic arbitrage to predatory strategies that directly harm users. This creates a hidden tax, eroding trust and adoption.

• Front-running and sandwich attacks cost users ~$1B+ annually.
• Time-bandit attacks threaten finality, forcing protocols to increase confirmation times.
• The economic burden falls disproportionately on retail users and DEX traders.

Preventing searchers from seeing transaction content until inclusion neutralizes front-running. This requires a dedicated decentralized block builder network.

• Flashbots' SUAVE aims to be a universal preference layer for cross-chain MEV.
• Enables fair ordering by default, separating execution from visibility.
• Shifts power from centralized builders (e.g., Titan) back to a decentralized network.

Instead of submitting precise transactions, users declare desired outcomes (intents). Solvers compete to fulfill them optimally, internalizing MEV.

• UniswapX and CowSwap already demonstrate this model's efficiency.
• Anoma and Essential are building generalized intent-centric chains.
• Captures MEV for user rebates instead of searcher profit, realigning incentives.

Proposer-Builder Separation (PBS) created a builder market where ~90% of Ethereum blocks are built by three entities. This is a critical centralization vector.

• Builders like Titan and rsync control transaction ordering.
• Creates single points of failure and potential censorship.
• Threatens the credible neutrality of the base layer.

Formalizing PBS at the protocol level (e.g., Ethereum's ePBS) removes trust from the builder market. Coupled with DVT, it decentralizes block production.

• Ethereum's roadmap explicitly includes enshrined PBS.
• Obol and SSV Network enable distributed validator clusters.
• Hardens the network against collusion and censorship.

The endgame is treating MEV as a measurable, allocatable resource managed by the protocol for public good. This transforms a threat into a funding mechanism.

• MEV burn / smoothing redistributes extracted value.
• MEV tax could fund protocol development or staking rewards.
• Aligns long-term sustainability with network security, moving beyond mitigation to utilization.

Generalized Extractable Value (GEV) incentivizes validators to attack chain liveness for profit, threatening finality. This is a fundamental security flaw in pure PBS models.

• Time-Bandit Attacks can reorg blocks for multi-million dollar arbitrage.
• PBS alone cannot prevent proposers from censoring or withholding blocks.
• Solution: Enshrined Proposer-Builder Separation (ePBS) with cryptoeconomic penalties for liveness failures.

A dedicated chain for decentralized block building, separating expression and execution of intents. It aims to commoditize the builder layer.

• Intents are expressed in a shared, private mempool (SUAVE).
• Builders compete on execution quality, not just capital.
• Result: Reduces centralization pressure and frontrunning by design, moving value from searchers to users.

Shift from transactional (users sign tx) to declarative (users state goals). This abstracts MEV complexity and returns value.

• Protocols like UniswapX & CowSwap act as solvers, competing to fulfill user intents.
• MEV becomes a public resource captured by the protocol/DAO via auctions.
• Future: Cross-domain intents via Across, Socket, LayerZero create a unified liquidity layer.

Prevent frontrunning by hiding transaction content until block inclusion. This requires a decentralized key management layer.

• Shutter Network uses a threshold encryption scheme with a DKG.
• Content is revealed only after a random, fixed delay post-block.
• Trade-off: Adds ~1-2s latency but eliminates toxic orderflow and sandwich attacks.

A crude but effective interim solution: force MEV revenue sharing from builders to proposers/validators via protocol rules.

• Ethereum's PBS with MEV-Boost already enables this via block auctions.
• Distributes profits more widely, reducing centralization incentives.
• Limitation: Does not solve liveness attacks or user-level fairness.

The final state: MEV is not extracted, but is a measurable, auctioned resource whose proceeds fund public goods and secure the chain.

• MEV Auction (MEVA) models, like those researched for Ethereum, formalize this.
• Revenue funds protocol development, staking yields, or burn mechanisms.
• Transforms MEV from a security threat into a sustainable subsidy.