Why 'Fair' MEV Distribution is an Oxymoron

Fairness is a protocol abstraction that dissolves upon contact with the validator's profit motive. Builders and searchers like Flashbots and Jito Labs optimize for extractable value, not equitable distribution.

The 'fair' sequencing layer is a logical impossibility because block producers are rational economic agents. They will always sell priority to the highest bidder, whether through private mempools or off-chain auctions.

Protocols like UniswapX and CoW Swap attempt to enforce fairness via intents, but they merely shift the MEV extraction point from the DEX to the solver network or cross-chain bridge.

Evidence: Over 90% of Ethereum blocks are now built by professional builders using MEV-Boost, proving that decentralized sequencing is a market, not a commons.

Fairness is a coordination problem. Protocol designers at Uniswap or Aave define fairness as equitable distribution, but searchers, builders, and validators are rational economic agents. Their incentive is profit, not equity.

Redistribution creates new MEV. Mechanisms like MEV-Boost's proposer-builder separation or Flashbots' SUAVE aim to redistribute value, but they create new arbitrage surfaces. The act of routing a transaction through a 'fair' system is itself a value-extractable event.

You cannot outsource morality. Protocols like CowSwap or 1inch that use solvers for 'fair' routing delegate the moral dilemma. The winning solver's bid price inherently includes the value of the extracted MEV, which is not returned to the user.

Evidence: In Ethereum's PBS model, over 90% of blocks use MEV-Boost, concentrating builder power. The top three builders frequently capture the majority of relayed blocks, demonstrating that redistribution centralizes, not decentralizes, value capture.

The sequencer is the arbiter. Any system that orders transactions inherently decides which MEV opportunities are captured and by whom. Proposals for 'fair' distribution via auctions or redistribution are just moving the arbitration point, not eliminating it.

Fairness is a market outcome. The market for block space, not a protocol rule, determines MEV distribution. Attempts to enforce fairness, like MEV-Boost's PBS, simply create a secondary market where validators auction the right to be the arbiter.

Redistribution creates new arbiters. Protocols like CowSwap and UniswapX that use solvers for intent execution shift the arbitration from the sequencer to the solver network. The solver winning the batch is the new, centralized point of MEV capture.

Evidence: In Ethereum's PBS, over 90% of blocks are built by three dominant builders, proving that arbitrage power consolidates regardless of the distribution mechanism's design.

Fairness is a thermodynamic loss. Any system promising equitable MEV distribution creates arbitrage between the promised ideal and the physical reality of latency and capital. This gap is a free option for sophisticated actors like Jump Crypto or Wintermute to extract.

Cryptoeconomics centralizes by design. Protocols like CowSwap and UniswapX that use batch auctions to reduce MEV merely shift the extraction point. The value accrues to the entity controlling the ordering bottleneck, whether it's a centralized sequencer or a validator cartel.

The evidence is in the mempool. Over 90% of Ethereum block space is filled by private orderflow deals between searchers and builders like Flashbots. This proves fair distribution is a market failure; the efficient outcome is a privately negotiated commodity.