'Fair' MEV Distribution is a Protocol Design Problem, Not a Market One

PBS outsources block building but not value capture. The builder market is an oligopoly where ~3 entities build >80% of Ethereum blocks. Value flows to capital-rich players, not users or dapps.

• Centralization Pressure: Builders require massive, centralized capital for MEV-boost relays.
• Value Leakage: No protocol mechanism to redirect captured MEV back to the transaction's origin.

Formalize MEV redistribution in the protocol layer. PBS++ and EigenLayer's enshrined proposers move auction logic on-chain, enabling verifiable, permissionless participation and programmable revenue splits.

• Credible Neutrality: Removes trust in off-chain relays and builder cartels.
• Direct Redistribution: Protocol can automatically siphon a % of MEV to a public good fund or burn it.

Flashbots' SUAVE re-architects the mempool and block building as a decentralized network. It makes MEV extraction a permissionless, competitive utility, not a private good.

• Universal Mempool: Decouples transaction flow from any single chain.
• Competitive Execution: Searchers bid for execution, driving profits down and user surplus up.

Protocols like CowSwap and UniswapX use batch auctions and fillers to internalize MEV. This is a market failure signal; dApps are forced to build bespoke systems to protect users.

• Intent-Based Architectures: Users submit desired outcomes, not transactions, neutralizing frontrunning.
• Cost Internalization: MEV is captured and recycled as better prices or direct rebates.

In a standard PoS chain, validators capture all MEV from front-running and arbitrage, creating a regressive tax on users. This centralizes stake and incentivizes sophisticated, opaque infrastructure.

• Result: ~$1B+ annual MEV extracted on Ethereum alone.
• Consequence: User slippage and failed transactions subsidize the validator set.

Proposer-Builder Separation (PBS) externalizes block building via a competitive auction (e.g., MEV-Boost). This creates a transparent market where builders bid for block space, and validators (proposers) capture a share of the revenue.

• Key Benefit: Democratizes access to MEV revenue for all validators.
• Key Benefit: Separates block production from execution, reducing centralization pressure.

Osmosis bakes MEV capture directly into its AMM. A portion of arbitrage profits from each block is siphoned into a community pool or distributed to stakers via the protocol itself.

• Key Benefit: Recaptures value for the protocol and its stakeholders.
• Key Benefit: Reduces the incentive for off-chain, predatory arbitrage bots.

Shutter Network uses threshold cryptography to encrypt transaction contents until a block is proposed. This prevents front-running and sandwich attacks at the protocol level by blinding searchers.

• Key Benefit: Eliminates a dominant class of harmful MEV.
• Key Benefit: Preserves composability and user experience of a public mempool.

SUAVE is a dedicated chain for preference expression and block building. It allows users and wallets to auction their transaction order flow directly to builders, capturing value for themselves.

• Key Benefit: Flips the model: users auction their intent, not builders their blocks.
• Key Benefit: Unbundles the block building market, increasing competition.

Standard PBS ensures fair distribution among validators but does nothing for users. The builder still extracts maximum value from user transactions. This is a market solution, not a user-centric protocol fix.

• Result: MEV supply chain becomes more efficient, but the economic burden remains on users.
• Consequence: Requires additional layers (like OFAs or encrypted mempools) for full fairness.