Why MEV Cannot Be Solved Without Sequencer Decentralization

A single entity ordering transactions creates an irresolvable conflict of interest. The sequencer can front-run, censor, and extract value directly, making all other mitigations downstream patches.

• Guaranteed MEV: The sequencer has perfect knowledge of the pending transaction pool.
• Censorship Vector: A single entity can block transactions for regulatory or competitive reasons.
• Systemic Risk: Downtime or malicious action halts the entire chain.

These protocols move ordering logic into smart contracts, using batch auctions and solvers to neutralize simple arbitrage. However, they are application-specific and push complexity to the edges.

• Fragmented Liquidity: Each app runs its own mini-sequencer/auction house.
• Solver Collusion: Solvers can form cartels, recreating MEV at a different layer.
• Limited Scope: Only protects specific trade types, not general transaction flow.

PBS, pioneered by Ethereum, separates block building from proposing. Builders compete in a sealed-bid auction, theoretically commoditizing block space. Yet, it relies on honest relayers and concentrates power in a few professional builders.

• Builder Centralization: ~3 builders often dominate Ethereum block production.
• Relayer Trust: Validators must trust relays not to censor or steal bids.
• L2 Incompatibility: PBS is a consensus-layer fix, not directly portable to rollup sequencers.

Encrypt transactions until they are included in a block, blinding the sequencer. This requires trusted hardware (SGX) or MPC, introducing new trust assumptions and latency.

• Trusted Execution: Relies on Intel SGX or a decentralized key management network.
• Latency Penalty: Added rounds of encryption/decryption increase time to finality.
• Niche Attack Vectors: Vulnerable to TEE exploits and key leakage attacks.

Users submit intent-based transactions (what they want) rather than explicit instructions (how to do it). Solvers find the best path across chains. This abstracts but does not eliminate MEV; it shifts extraction to solver competition.

• Solver Oligopoly: Efficient solving requires capital and data, leading to centralization.
• Cross-Chain Complexity: Introduces bridging risks and additional trust layers.
• Opaque Pricing: Users pay for an outcome, obscuring the true cost of execution.

All current mitigations are workarounds for a centralized sequencer. True resolution requires decentralizing the sequencer role itself, distributing ordering power, trust, and economic incentives across a permissionless set of actors. This is the only way to align network security with user fairness.

• Eliminates Single Point of Control: No single entity can censor or front-run.
• Incentive Alignment: Sequencer rewards are distributed, not captured.
• Protocol-Native: A base-layer property, not a fragmented application-layer patch.

A single sequencer controls the entire transaction ordering, creating a censorship vector and a monopoly on MEV extraction. This centralizes power and undermines the core blockchain value proposition of credible neutrality.\n- Censorship Risk: The sequencer can front-run, censor, or reorder any transaction.\n- Economic Capture: All MEV flows to a single, opaque entity, creating a ~$500M+ annual revenue stream.

Separate the roles of block building (where MEV is extracted) from block proposing (which determines the canonical chain). This is the architectural blueprint adopted by Ethereum post-merge and protocols like Flashbots SUAVE.\n- Neutral Proposer: The sequencer's role is reduced to a neutral ordering rule, eliminating its power to censor.\n- Competitive Builders: A competitive market of builders (e.g., bloXroute, Titan) competes on execution quality, pushing MEV savings back to users.

Decentralization requires a robust, Sybil-resistant mechanism for selecting who sequences the next block. This is achieved through Distributed Validator Technology (DVT) and verifiable random functions (VRFs), as seen in EigenLayer and Espresso Systems.\n- No Single Leader: A committee of nodes reaches consensus on ordering via BFT consensus or threshold signatures.\n- Liveness Guarantee: The network can tolerate >33% node failure without halting, eliminating downtime risk from a single operator.

With a decentralized sequencer enforcing a fair ordering rule (like first-come-first-served), MEV extraction shifts from a hidden tax to a transparent, auction-based process. Protocols like CowSwap and UniswapX demonstrate this with their intent-based architectures.\n- User Sovereignty: Users submit intents; solvers compete to fulfill them, returning surplus as savings.\n- Reduced Extractable Value: The arbitrage and sandwich MEV that relies on malicious reordering is structurally eliminated.