The Future of L1s: Defined by Their MEV Strategy

This philosophy, championed by Ethereum post-Merge, treats MEV as an unavoidable market force to be captured and redistributed. It uses proposer-builder separation (PBS) and MEV-Boost to create a competitive auction for block space, siphoning value from searchers back to validators/stakers.

• Key Benefit: Economic Security Boost: MEV revenue supplements staking yields, making attacks more expensive.
• Key Benefit: Credible Neutrality: The protocol doesn't pick winners; it creates a transparent market for block production.

This school, exemplified by Solana and Sui, views MEV as a symptom of slow, opaque block production. The solution is maximal pre-execution parallelism and sub-second finality, collapsing the arbitrage time window to near-zero.

• Key Benefit: Native Front-Running Resistance: Fast, deterministic execution leaves no profitable gap for generalized front-running.
• Key Benefit: Simplified UX: Users experience predictable costs without hidden sandwich attacks.

This approach, pioneered by Aztec and research in FHE-rollups, posits that MEV exists because transaction intent is public. The solution is to encrypt mempools and compute over ciphertext, making the transaction graph opaque until settlement.

• Key Benefit: Maximum Censorship Resistance: Even validators cannot see or reorder transactions based on content.
• Key Benefit: Institutional-Grade Privacy: Enables complex DeFi strategies without information leakage.

The Problem: High-frequency MEV on a fast, single-threaded chain creates a winner-take-all race, centralizing block production to the fastest, best-connected validators. The Solution: Jito's SUAVE-aligned auction and ~$1B+ in MEV rewards redistributed to stakers. This creates a formalized, transparent market, but the underlying speed still advantages centralized searcher-builder infrastructure.

The Problem: Naive rollups inherit Ethereum's MEV problems, letting sequencers capture all value and creating toxic arbitrage between L1 and L2. The Solution: Architecting the PBS (Proposer-Builder Separation) at the L2 level. Fuel with its UTXO model and Eclipse with SVM execution bake MEV redistribution and censorship resistance into the protocol's first principles, turning a cost into a feature.

The Problem: Sovereign rollups and alt-DA layers fragment liquidity and MEV, making it inefficient and insecure for small chains. The Solution: A modular stack for MEV management. Celestia provides neutral data for verifiable inclusion. EigenLayer restakers can be slashed for MEV censorship, creating a decentralized, economically secured sequencing layer for hundreds of rollups.

The Problem: Sequential execution creates obvious, easily-extracted arbitrage opportunities across dependent transactions. The Solution: Massive parallel execution via Move and object-centric models. By processing non-conflicting transactions simultaneously, they eliminate a vast swath of simple, deleterious MEV (e.g., DEX arb front-running) at the consensus layer, fundamentally changing the economic landscape for searchers.

The Problem: MEV is a parasitic tax that leaks value from users and dApps to validators, undermining ecosystem growth. The Solution: Protocol-level capture and redistribution. Berachain's tri-token model (BERA, BGT, HONEY) uses consensus-level MEV auctions to fund its liquidity-backed stablecoin and reward governance stakers, directly recycling extractive value into ecosystem incentives.

The Problem: Transparent mempools are the root cause of front-running and sandwich attacks, a direct wealth transfer from users to bots. The Solution: Encrypted mempool protocols like Shutter Network. The future standard is SUAVE – a dedicated decentralized chain for preference expression and block building. It turns every chain into an MEV source chain, creating a unified, competitive market that returns optimal value to users.

Public mempools and naive FIFO ordering create a ~$1B annual rent extracted from users. This manifests as front-run arbitrage, sandwich attacks, and unpredictable gas fees that degrade UX and deter adoption.

• Security Cost: Validator rewards become dependent on extractive MEV, centralizing power.
• User Cost: End-users subsidize this system via worse execution prices and failed transactions.

L1s must bake MEV management into the protocol layer. This isn't about prevention, but about capturing and redistributing value to secure the network and reward users. See Solana's localized fee markets and Aptos's Block-STM for inspiration.

• Protocol-Enforced Auctions: Use encrypted mempools (e.g., SUAVE) or order-flow auctions to commoditize searchers.
• Value Redistribution: Direct a portion of captured MEV to a public goods fund or as staking rewards, aligning validator incentives with network health.

The future is intent-based architectures, not simple transactions. L1s that natively support expressive transaction types (like Ethereum with ERC-4337 account abstraction) will win developer mindshare. This shifts MEV from a toxic byproduct to a managed resource for optimal execution.

• Solver Networks: Enable competitive solvers (as seen in UniswapX and CowSwap) to fulfill user intents, commoditizing block space.
• User Sovereignty: Users specify what they want, not how to do it, leading to better prices and guaranteed execution.

In an MEV-aware world, value accrual flips from external searcher/builder cartels back to the base layer token. An L1's ability to internalize and redistribute MEV becomes a fundamental valuation metric, akin to fee revenue for a traditional platform.

• Sustainable Security: MEV rewards can supplement or replace inflationary token emissions.
• Moats via Design: MEV policy creates hard-to-fork economic and social moats, as seen in nascent designs from Berachain and Monad.