MEV Infrastructure Determines Transaction Fairness

Public mempools broadcast pending transactions, creating a free-for-all for searchers and bots. This leads to systemic exploitation of retail users.

• Front-running and sandwich attacks extract ~$1B+ annually from users.
• Creates a two-tiered system where sophisticated actors always win.
• Forces protocols to build complex, expensive workarounds.

Protocols like Flashbots Protect and bloXroute's Backbone encrypt transactions until block inclusion, neutralizing front-running.

• Fair ordering is enforced by the sequencer or block builder.
• Preserves composability while removing the toxic MEV surface.
• Represents a shift from permissionless extraction to permissionless protection.

SUAVE (Single Unified Auction for Value Expression) aims to decentralize the block building market itself.

• Separates expression of preference (user intent) from execution (block building).
• Creates a competitive marketplace for block space, reducing builder/validator collusion.
• If successful, it becomes the fairness layer for all chains.

Protocols like UniswapX, CowSwap, and Across abstract execution away from users. Users submit intents (what they want), not transactions (how to do it).

• Solvers compete to fulfill the intent optimally, passing savings to the user.
• MEV is internalized as solver profit, not extracted as user loss.
• Represents the end-state: fairness via economic competition at the solver level.

PBS, a core Ethereum roadmap feature, legally separates the role of block proposal from block building.

• Prevents validators from seeing transaction order to front-run their own blocks.
• Creates a credibly neutral auction for block space, with revenue going to the validator (proposer).
• In-protocol PBS is the final piece for L1 fairness; rollups implement their own variants today.

Fairness is not binary; it's measured in latency from transaction creation to secure inclusion. This is the new infrastructure KPI.

• Fast Lane Services (e.g., Flashbots Protect RPC) offer sub-second fair inclusion.
• Cross-chain latency via LayerZero or Axelar introduces new fairness challenges.
• The race is to minimize the vulnerability window to zero across all layers.

Without explicit infrastructure, MEV is extracted opaquely, creating a hidden tax on every user. This manifests as front-running, sandwich attacks, and failed arbitrage.\n- ~$1B+ in MEV extracted annually across major chains.\n- >90% of DEX trades on Ethereum are vulnerable to sandwich attacks.\n- Failed transactions waste gas and degrade UX, especially for retail.

Separating transaction content from ordering prevents front-running. Chains like Solana (Jito) and Ethereum (via Flashbots SUAVE) are pioneering this.\n- Commit-reveal schemes hide transaction intent until inclusion.\n- Threshold Encryption (e.g., Shutter Network) secures the mempool.\n- Enables fair ordering where time of submission, not gas bid, determines priority.

Dominance by a few builders (e.g., Flashbots, BloXroute) creates systemic risk and reduces competition. This leads to censorship and potential collusion.\n- >80% of Ethereum blocks are built by a handful of entities.\n- OFAC compliance can lead to transaction censorship.\n- Reduces proposer revenue through lack of competitive bidding.

Proposer-Builder Separation (PBS) and open builder markets decentralize block production. EigenLayer's EigenDA and MEV-Share protocols enable this.\n- Competitive bidding between builders maximizes proposer revenue.\n- Permissionless participation reduces centralization risk.\n- Credible neutrality is enforced at the protocol level.

Extracted value flows to searchers and validators, not users or dApps. This misalignment stifles application-layer innovation and user loyalty.\n- 0% of sandwich MEV is typically returned to the victim.\n- DApp economics are undermined by value leakage.\n- Creates adversarial, not cooperative, ecosystem dynamics.

Protocols can internalize and redistribute MEV. CowSwap (batch auctions), UniswapX (intent-based), and Maverick (dynamic fees) demonstrate this.\n- Batch auctions eliminate on-chain arbitrage, returning value to traders.\n- Order flow auctions (OFAs) let users sell their transaction rights.\n- Dynamic fee AMMs capture and redistribute arbitrage profits to LPs.