Why Most MEV 'Solutions' Simply Redistribute, Not Eliminate, Value Extraction

MEV redistribution is inevitable because value extraction stems from fundamental blockchain mechanics like transaction ordering and state differences. Protocols like Flashbots' SUAVE or CoW Swap's batch auctions don't eliminate this value; they redirect its flow from searchers to users or other system participants.

Proposer-Builder Separation (PBS) formalizes extraction. Ethereum's PBS roadmap doesn't remove MEV; it creates a professionalized market where specialized builders (e.g., bloXroute, Relays) compete to extract and share profits with validators, potentially centralizing block production power.

Private order flow is the new battleground. Solutions like RPC endpoints from Blink or Rivet incentivize users to sell their transaction order rights, shifting value from public mempools to private channels. This creates a two-tier system where retail loses.

Evidence: Flashbots' MEV-Boost captured >90% of Ethereum blocks post-Merge, demonstrating how 'solutions' consolidate, not dissipate, extractive power. The value didn't vanish; it was captured by a new cartel of builders and relays.

PBS formalizes a supply chain. It creates a market where builders compete to create the most profitable block, and proposers auction the right to fill it. This shifts value from the monolithic validator to specialized actors like Flashbots, bloXroute, and Titan.

MEV-Boost is a redistribution engine. The protocol does not reduce the total extracted value; it redirects profits from the proposer to the builder and searcher. The winning builder's bid becomes the validator's new revenue stream.

The economic surplus is preserved. The extracted value from users (e.g., via arbitrage on Uniswap or liquidations on Aave) remains. PBS simply determines which professional operators—not users or solo stakers—capture it.

Evidence: Post-merge, over 90% of Ethereum blocks are built via MEV-Boost. This proves the economic dominance of this redistributive model, concentrating block production power in a handful of builder entities.

Redistribution is not elimination. Solutions like MEV-Boost auctions and Flashbots SUAVE shift extracted value from searchers to validators or users, but the underlying search-and-extract economic game persists. The network still pays for the same inefficiency.

The protocol is the ultimate extractor. In a mature system, the protocol itself captures the MEV surplus, as seen in UniswapX's Dutch auctions or CowSwap's batch auctions. This is superior redistribution but still a tax on every swap.

User experience remains adversarial. Even with proposer-builder separation (PBS), users must trust a relay or a builder not to censor or front-run. The mental overhead of navigating MEV risks is a persistent tax on adoption.

Evidence: The Ethereum merge redirected ~$1.3B in annual MEV to validators via MEV-Boost. This is a massive wealth transfer, but the extracted value still originates from the same user transactions.

MEV redistribution is not elimination. Protocols like Flashbots' SUAVE or CoW Swap's batch auctions change who captures value, not the fact that value is extracted from ordinary users via latency and ordering advantages.

Neutral infrastructure requires new primitives. The core failure is treating block production as a proprietary service. A truly neutral base layer needs a credibly neutral block-building market, not just a private one like those run by Jito or bloXroute.

Intent-based architectures externalize complexity. Systems like UniswapX and Across Protocol shift the burden of execution from users to solvers, but this creates a new MEV market for solver competition, again redistributing, not removing, extracted value.

Evidence: Ethereum's PBS (Proposer-Builder Separation) framework aims for this neutrality by standardizing the builder role, but its success depends on preventing builder cartelization—a problem current implementations like MEV-Boost have not solved.