MEV is infrastructure. The narrative shifts from pure extraction to a redistributable resource. Protocols like Flashbots' SUAVE and CowSwap now treat MEV as a system input, not just an output for searchers.
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The Future of MEV: From Extraction to Redistribution
MEV is no longer just a tax. The next wave of innovation captures and redistributes value back to users, creating a new alignment between protocols, builders, and capital.
introduction
THE SHIFT
Introduction
MEV is evolving from a hidden tax into a programmable primitive for value redistribution.
Redistribution defines competitiveness. The proposer-builder separation (PBS) model, pioneered by Ethereum, creates a market where block builders compete to share MEV profits with validators and users. This is the new protocol moat.
User experience is the battleground. Intents-based systems from UniswapX and Across Protocol abstract MEV away from users, guaranteeing execution and returning captured value. The protocol that best redistributes MEV wins adoption.
Evidence: In 2023, MEV-Boost relays distributed over 400k ETH to Ethereum validators, proving redistribution at scale. This capital flow now dictates validator economics and chain security.
thesis-statement
THE INCENTIVE FLIP
The Redistribution Thesis
MEV's future is not its elimination, but its systematic capture and redistribution to protocol users and builders.
MEV is a permanent tax. It is a structural feature of permissionless block-building, not a bug. The goal shifts from naive prevention to creating credibly neutral markets for its capture.
Redistribution realigns incentives. Protocols like CowSwap and UniswapX use batch auctions and solver networks to internalize MEV, converting extractive value into better prices for users.
Proposer-Builder Separation (PBS) is the infrastructure. PBS, as implemented by Ethereum and Solana's Jito, formalizes the block-building market, creating a clear fee distribution point for MEV proceeds.
Evidence: Jito's MEV redistribution to Solana stakers has distributed over $1.5B, demonstrating that redistribution drives staking yields and directly improves protocol security.
key-trends
FROM EXTRACTION TO VALUE FLOW
Key Trends Driving Redistribution
The MEV landscape is shifting from a zero-sum extraction game to a structured ecosystem where value is programmatically captured and redistributed to users and protocols.
01
The Problem: Opaque Searcher Cartels
Private mempools and exclusive order flow deals concentrate MEV profits among a few sophisticated players, creating systemic risk and degrading the public mempool.\n- >90% of high-value DEX trades are front-run or sandwiched.\n- Public block builders capture only ~15% of Ethereum block value.
>90%
Trades Targeted
~15%
Public Share
02
The Solution: Proposer-Builder Separation (PBS)
Enshrined PBS, as seen in Ethereum's post-Dencun roadmap, formalizes the market between block builders and proposers, creating a competitive auction for block space.\n- Enables fair value redistribution via MEV-Boost and mev-geth.\n- Unlocks ~$1B+ annually in potential validator rewards from MEV.
$1B+
Annual Value
100%
Validator Access
03
The Problem: User Value Leakage
Retail users consistently receive worse prices due to MEV, with value extracted on every swap, liquidation, and NFT mint. This is a direct tax on protocol activity.\n- Average swap slippage can be 2-5x higher due to sandwich attacks.\n- Creates a negative feedback loop for adoption and TVL.
2-5x
Slippage Increase
Direct Tax
On Activity
04
The Solution: Intents & SUAVE
Intent-based architectures (UniswapX, CowSwap) and shared sequencers like SUAVE shift the paradigm from transaction execution to outcome fulfillment.\n- Users express what they want, not how to do it.\n- Solvers compete to provide best execution, with savings redistributed back.
Best Execution
New Paradigm
Redistributed
User Savings
05
The Problem: Protocol Revenue Erosion
MEV siphons value that should accrue to protocol treasuries via fees. Searchers capture arbitrage between AMM pools without paying the protocol for creating the opportunity.\n- Billions in arbitrage profits are externalized.\n- Undermines sustainable tokenomics and protocol-owned liquidity.
Billions
Profit Externalized
Core Weakness
Tokenomics
06
The Solution: MEV-Capturing AMMs & Auctions
Next-gen AMMs like Maverick and Aera use concentrated liquidity and dynamic fees to internalize arbitrage MEV. Protocols like Flashbots' MEV-Share enable conditional order flow auctions.\n- Turns MEV into a protocol revenue stream.\n- UniswapX already redirects ~$1M+ weekly in filler rebates to users.
Revenue Stream
For Protocols
$1M+
Weekly Redistribution
FROM EXTRACTION TO REDISTRIBUTION
The MEV Stack: Old vs. New Model
A comparison of the traditional, extractive MEV supply chain against emerging, redistributive infrastructure.
| Core Metric / Capability | Traditional Model (Extractive) | New Model (Redistributive) | Exemplar Protocols |
|---|---|---|---|
Primary Economic Flow | Value to Searchers & Validators | Value to Users & Builders | Flashbots SUAVE, CowSwap |
Searcher Profit Source | Arbitrage, Frontrunning, Sandwiching | Order Flow Auctions, Intents, Bundling | UniswapX, 1inch Fusion, Across |
User Experience Impact | Negative Slippage, Failed Transactions | Guaranteed Execution, MEV Rebates | CowSwap, UniswapX, PropellerHeads |
Transaction Privacy | Public Mempool Exposure | Encrypted Mempools / Private Channels | Flashbots Protect, Shutter Network |
Validator/Builder Role | Passive Order Taker | Active Auctioneer for Block Space | Ethereum PBS, MEV-Boost Relays |
Cross-Chain MEV Handling | Fragmented, High-Risk Atomic Arb | Coordinated via Intents & Shared Sequencing | Across, Chainlink CCIP, LayerZero |
Fee Capture by Protocol | 0% (Value Leaks to L1) |
| UniswapX, CowSwap |
Time to Finality for User | 12-30 seconds (mempool contention) | < 1 second (pre-confirmation) | Anoma, Espresso Systems |
deep-dive
THE NEW PRIMITIVES
Architecting Redistribution: Intent, Auctions, and Shared Order Flow
The future of MEV shifts from opaque extraction to transparent redistribution via new architectural primitives.
Intent-based architectures invert the transaction model. Users submit desired outcomes, not explicit instructions, delegating pathfinding to solvers. This creates a competitive solver market where MEV is captured and redistributed, as seen in UniswapX and CowSwap.
Order flow auctions (OFAs) explicitly commoditize transaction ordering rights. Protocols like Flashbots SUAVE and Revert Finance auction user bundles to the highest bidder, converting private MEV into a public revenue stream for users and applications.
Shared sequencers represent the logical endpoint. Networks like Astria and Espresso operate as neutral, auction-based sequencing layers, forcing L2s to compete for block space. This separates execution from sequencing, creating a transparent MEV marketplace.
The redistribution is measurable. On Across Protocol, 100% of captured MEV is returned to users as bridge discounts. This proves the model's viability, turning a systemic leak into a protocol-owned revenue mechanism.
protocol-spotlight
FROM EXTRACTION TO EQUITY
Protocol Spotlight: The Redistribution Vanguard
The next evolution of MEV shifts the paradigm from adversarial extraction to programmatic redistribution, realigning incentives for users and builders.
01
The Problem: Opaque Extraction
Traditional MEV is a hidden tax, with searchers and validators capturing ~$1B+ annually from user slippage and failed transactions. This creates systemic risks like chain reorgs and front-running, degrading UX and trust.
- Adversarial Model: Users compete against the network.
- Centralizing Force: Rewards accrue to sophisticated, capital-heavy players.
$1B+
Annual Extract
>90%
User Loss
02
The Solution: Programmable Redistribution
Protocols like CowSwap, UniswapX, and Across use intents and batch auctions to capture MEV and redistribute it. This transforms MEV from a cost into a subsidy for users.
- Intent-Based Design: Users declare outcomes, solvers compete on fulfillment.
- Surplus Redistribution: Captured value is returned as better prices or direct rebates.
$500M+
Surplus Saved
0-gas
Failed Tx
03
Flashbots SUAVE: The Universal Solver
SUAVE is a decentralized block-building mempool and executor network. It aims to democratize access to MEV by separating block building from proposing, creating a competitive marketplace for execution.
- Decentralized Mempool: Breaks validator/solver cartels.
- Cross-Chain Scope: Native intent flow between Ethereum, Arbitrum, Optimism.
100%
Chain Agnostic
~500ms
Auction Latency
04
The Endgame: MEV as Public Good
The final stage is protocol-owned MEV, where captured value funds core development and staker yields. This aligns long-term sustainability with user prosperity, turning a parasitic cost into a foundational revenue stream.
- Protocol-Owned Liquidity: MEV subsidizes LP yields and stability.
- Credible Neutrality: Transparent, rule-based redistribution replaces backroom deals.
10-30%
Yield Boost
0-trust
Verification
counter-argument
THE INCENTIVE MISMATCH
The Bear Case: Why Redistribution Might Fail
Redistributing MEV faces fundamental economic and technical barriers that may prove insurmountable.
Seigniorage is more profitable. Protocol treasuries and validators capture more value from extraction than redistribution. Projects like EigenLayer and Flashbots SUAVE prioritize validator revenue and network security over user rebates, creating a structural incentive mismatch.
Redistribution creates new MEV. Rebate mechanisms like those proposed by CowSwap or UniswapX become targets for manipulation. Sophisticated actors will front-run or sandwich the redistribution event itself, negating user benefits and adding complexity.
Coordination costs are prohibitive. Achieving consensus on fair redistribution across chains and dApps is a governance nightmare. The failure of early DAO experiments shows that decentralized coordination on value distribution rarely scales efficiently.
Evidence: The total extracted MEV on Ethereum exceeds $1B annually, yet successful redistribution mechanisms like EIP-1559's burn are the exception, not the rule. Most value flows to searchers and validators, not users.
investment-thesis
THE VALUE FLOW
The Investment Thesis: Follow the Value Flow
The future of MEV is not its elimination, but its systematic capture and redistribution to protocol users and builders.
MEV is a tax on all on-chain activity, currently captured by searchers and validators. The investment thesis focuses on protocols that intercept and redistribute this value.
The redistribution mechanism is the key differentiator. Compare SUAVE's sealed-bid auctions that return profits to users versus MEV-Share's order flow auctions that share profits with searchers and users.
The endgame is vertical integration. Protocols like Flashbots and Jito demonstrate that the infrastructure layer capturing MEV will subsume the application layer's value.
Evidence: Jito's Solana MEV redistribution contributed over $250M in staker rewards in 2023, proving the model's economic viability.
takeaways
THE FUTURE OF MEV
Key Takeaways
The next evolution of MEV shifts the paradigm from a miner's secret tax to a transparent, protocol-managed resource.
01
The Problem: Opaque Extraction
Today, searchers and validators capture ~$1B+ annually in value from users via front-running and sandwich attacks. This creates negative externalities like network congestion and degraded UX, with no native mechanism for user compensation.\n- Value Leakage: Profits exit the application layer.\n- UX Degradation: Failed transactions and unpredictable slippage.
$1B+
Annual Extract
>90%
User Loss
02
The Solution: Intent-Based Architectures
Protocols like UniswapX, CowSwap, and Across abstract execution. Users submit desired outcomes (intents), while a competitive solver network fulfills them, capturing and redistributing MEV.\n- User Sovereignty: Express what, not how.\n- Efficiency Gains: Solvers optimize for best execution, not just profit.
~30%
Better Prices
0 Slippage
Guaranteed
03
The Mechanism: Proposer-Builder Separation (PBS)
PBS, a core feature of Ethereum's roadmap, formally separates block building from proposal. It creates a competitive market for block space, enabling MEV-Boost and MEV smoothing via protocols like EigenLayer.\n- Transparent Auction: MEV is bid on openly.\n- Redistribution: Fees can be directed to stakers or a public good fund.
>99%
Eth Validators
10x+
Builder Competition
04
The Endgame: MEV as Protocol Revenue
Projects like dYdX v4 and Sei are designing chains where captured MEV is a primary revenue stream, shared with stakeholders or used to subsidize user transactions.\n- Sustainable Economics: Turns a negative externality into a positive flywheel.\n- User Alignment: Value accrues back to the community and token.
Protocol-Owned
Revenue Stream
Subsidized
User Gas
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