The Future of MEV in Interconnected Rollups

Atomic arbitrage across rollups requires capital, data, and execution speed that only a few can marshal. This creates a natural oligopoly.\n- Requires multi-chain capital locked in bridges or smart accounts.\n- Demands sub-second latency across disparate sequencer mempools.\n- Centralizes around entities like Jump Crypto, Wintermute, and sophisticated DAO treasuries.

The entity controlling transaction ordering on a rollup (the sequencer) becomes the mandatory rent collector for all cross-domain MEV. This is a more powerful position than a validator in a monolithic chain.\n- Controls the atomic bundle - can front-run or censor cross-chain arbitrage.\n- Can run its own searcher with privileged mempool access.\n- Forces protocols like UniswapX and Across to negotiate directly with sequencer operators for optimal routing.

Projects like Espresso, Astria, and Shared Sequencer specs promise decentralization but risk creating a coordinated ordering cartel. A few shared sequencers will service dozens of rollups.\n- Enables MEV sharing and cross-rollup bundle optimization at the protocol level.\n- Concentrates economic power in the hands of the shared sequencer's validator set.\n- Makes rollups clients, not peers, in the MEV supply chain, reliant on a central sequencing layer.

The response to sequencer centralization is to move computation off-chain. Systems like UniswapX, Anoma, and SUAVE shift the MEV auction to a solver network before transactions hit a sequencer.\n- Decouples execution from ordering - solvers compete in a private mempool.\n- Reduces sequencer's MEV tax by settling only the winning solution.\n- Creates a new centralization point at the solver/aggregator layer, but with more competition.

Searchers like Flashbots and Jito Labs will vertically integrate across rollup sequencers. Their capital and infrastructure advantage creates a cartel that dictates transaction ordering across chains, extracting >90% of high-value cross-domain arbitrage.\n- Risk: Centralized control over $100B+ in bridged liquidity.\n- Outcome: Rollup revenue leaks to external actors, undermining their economic security.

Protocols like UniswapX, CowSwap, and Across abstract execution to specialized solvers. This creates a new MEV supply chain where solvers compete on rollup inclusion, but the winning solver captures the bulk of the value.\n- Risk: Bridges become the ultimate MEV auction houses, not neutral infrastructure.\n- Outcome: User savings from better routing are offset by hidden extractive premiums.

With fast finality and centralized sequencing (e.g., Arbitrum, Optimism), the sequencer node becomes the ultimate frontrunner. Even with permissionless proposer-builder separation, the entity controlling the sequencing software has a millisecond-level advantage.\n- Risk: The "Fair Sequencing" promise is technically unenforceable.\n- Outcome: Native rollup MEV is captured before it ever reaches a public mempool.

Projects like Astria, Espresso, and Radius aim to decentralize sequencing across rollups. However, consolidating ordering power into one network creates a single point of economic and technical capture. A dominant shared sequencer becomes a super-Searcher.\n- Risk: Re-creates L1 validator centralization risks at the sequencing layer.\n- Outcome: Protocol-level MEV cartelization with formalized revenue sharing.

Encrypted mempools like Shutter Network or Fairblock are proposed as a solution. But they introduce a new set of trusted actors—the key holders or encryptors. This creates a privacy cartel that can auction decryption rights or selectively censor transactions.\n- Risk: MEV isn't eliminated; it's shifted to the governance of the privacy layer.\n- Outcome: Users trade miner extractable value for validator extractable value.

The endgame is rollups taking full responsibility for their execution environment. This means in-house, verifiable sequencer committees using technologies like SGX or MPC for fair ordering, and native intent-based AMMs that keep liquidity on-chain.\n- Solution: Internalize the MEV supply chain; make it a protocol revenue source.\n- Outcome: Capture value for the rollup's security budget, not external searchers.

Seeking arbitrage across rollups like Arbitrum, Optimism, and zkSync creates a multi-party prisoner's dilemma. Latency and settlement finality differences turn profitable opportunities into losses.

• Key Risk: Front-running and sandwich attacks become exponentially harder to detect and prevent.
• Key Insight: MEV revenue will concentrate on bridges and sequencers that control cross-domain transaction ordering.

Protocols like UniswapX and CowSwap abstract execution, allowing users to express desired outcomes. This shifts the MEV competition from searchers to solvers. Shared sequencers (e.g., Espresso, Astria) provide a neutral ordering layer across rollups.

• Key Benefit: User gets optimal price without managing complexity.
• Key Benefit: Reduces toxic MEV by batching and encrypting orders.

Bridges and messaging layers like LayerZero, Axelar, and Across are no longer just data pipes. They are becoming MEV-aware routing layers that internalize cross-chain arbitrage, offering users a better net price.

• Key Insight: The most valuable bridge will be the one that captures and redistributes MEV most efficiently.
• Key Risk: Centralization pressure on these routing hubs creates new trust assumptions.

Rollups will stop treating MEV as a leak and start auctioning it. Flashbots' SUAVE envisions a decentralized block builder network for cross-domain blocks. This turns MEV from an extractive tax into a sustainable, verifiable protocol subsidy.

• Key Benefit: Creates a native, crypto-economic security budget for L2s.
• Key Challenge: Requires robust cryptographic primitives for fair ordering across heterogeneous chains.