Why Shared Security Models Export MEV Risk

Shared security exports MEV. Rollups inherit L1's finality and censorship resistance, but their transaction ordering is a black box. This creates a MEV risk subsidy where L1 validators bear the systemic risk of malicious sequencing without capturing the value.

Sequencers are centralized MEV extractors. The dominant rollup model grants a single sequencer the right to order transactions. This creates a centralized MEV faucet, as seen with Arbitrum and Optimism's early sequencers, which internalizes profits while externalizing the L1 reorg risk of its actions.

The L1 bears the tail risk. If a rollup sequencer exploits a cross-domain MEV opportunity—like a flash loan attack bridging via Hop or Across—the resulting failed L1 settlement transactions and chain reorg pressure are absorbed by Ethereum validators, not the rollup.

Evidence: Over 90% of rollup blockspace is ordered by a single entity. This centralization creates a systemic risk vector where a compromised or malicious sequencer can force L1 into a state of transaction spam or attempted reorgs, degrading network performance for all.

Shared sequencers export risk. Chains like Arbitrum and Optimism using a shared sequencer (e.g., Espresso, Astria) do not eliminate MEV; they outsource its management. This creates a single point of failure where MEV extraction is concentrated in the sequencer's mempool, making censorship and value capture trivial for the controlling entity.

Economic gravity favors consolidation. The capital efficiency of centralized MEV extraction via a shared sequencer is superior to fragmented, chain-specific searcher markets. This mirrors the consolidation seen in L1s, where block builders like Flashbots dominate, and will repeat across the L2 landscape.

Intent-based architectures accelerate this. Protocols like UniswapX and Across abstract execution to specialized solvers, who must interact with the dominant sequencer for finality. This solver-sequencer nexus becomes the unavoidable choke point, further entrenching the consolidator's power.

Evidence: The proposed shared sequencer for Arbitrum, Optimism, and other L2s would instantly control ordering for a majority of Ethereum's rollup transaction volume, creating the largest MEV marketplace in crypto by forced aggregation.

Shared sequencers export risk. A single sequencer serving multiple rollups, like Astria or Espresso, creates a unified MEV extraction surface. This allows a cartel to front-run and sandwich trades across chains, turning a local L2 exploit into a multi-chain event.

Validators become cross-chain arbitrageurs. In proof-of-stake bridges like Cosmos IBC or Polkadot XCM, the same validator set secures multiple chains. This validator cartel internalizes cross-chain arbitrage, extracting value that should accrue to users or dApps like Osmosis or Moonbeam.

Intent-based systems centralize power. Solvers for protocols like UniswapX or Across must now compete across chains. The solver with the best cross-chain liquidity and messaging access, often via LayerZero or CCIP, becomes a mandatory gateway, replicating CEX order flow problems.

Evidence: The Wormhole attack demonstrated that a single bridge vulnerability drained $325M across Solana, Ethereum, and Terra. A cross-chain MEV cartel exploits the same trust model but for value extraction, not theft.

Mitigations export, not eliminate, risk. Sequencer-level solutions like private mempools (e.g., Flashbots Protect) or pre-confirmation services (e.g., EigenLayer's EigenDA) only hide MEV from the local chain. This concentrates risk at the final settlement layer, where cross-domain arbitrage bots execute the same value extraction on a larger, more liquid stage.

Shared security is a risk aggregator. Protocols like Celestia or EigenLayer's restaking pool validator security. This creates a single point of failure for MEV attacks; a sophisticated actor compromising one validator set can potentially attack all connected rollups or AVSs, turning a local exploit into a systemic event.

Cross-chain MEV is the real threat. The primary risk vector is not internal chain MEV but inter-domain arbitrage between L2s and L1. Bridges like Across and Stargate are natural targets. Mitigations on one chain simply push the profitable opportunity to the unmitigated bridge or destination chain, creating a risk asymmetry that attackers exploit.

Evidence: The Ethereum PBS (Proposer-Builder Separation) framework demonstrates this. While it democratizes block building on L1, it centralizes MEV extraction power in a few professional builder entities. Applying this model to L2s via shared sequencing (e.g., Espresso Systems) does not reduce the total extracted value; it centralizes its capture and links the economic security of multiple chains to the integrity of a single builder marketplace.