Cross-Rollup MEV

The most common form, where searchers exploit price differences for the same asset (e.g., ETH, USDC) that exist simultaneously on different rollups. This requires atomic execution across chains, often coordinated via a settlement layer like Ethereum L1.

• Example: Buying an NFT on Optimism and instantly selling it for a higher price on Arbitrum.
• Mechanism: Uses cross-domain MEV bundles that commit to actions on multiple rollups, with settlement conditional on all actions succeeding.

Searchers monitor lending protocols across rollups to liquidate undercollateralized positions. Value is extracted from liquidation penalties.

• Complexity: Requires tracking collateral value and debt positions that may be fragmented across chains.
• Opportunity: Arises when the value of collateral on one rollup drops rapidly relative to the debt denominated on another, before oracles update.

Ethereum's L1 acts as the trusted coordinator and enforcer for cross-rollup transactions. Searchers use L1 blockspace to post bundles that include conditional actions for multiple rollups.

• Atomicity: The L1 transaction ensures all rollup actions succeed or fail together.
• Latency Exploit: The time delay between a rollup state root being published to L1 and its finalization can be a source of MEV.

Cross-rollup MEV requires infrastructure and strategies far more complex than single-chain MEV.

• Multi-Chain Mempools: Searchers must monitor transaction pools and state across several rollup sequencers.
• Cross-Chain Simulation: Must simulate the outcome of interdependent transactions across different execution environments.
• Gas Optimization: Costs must be managed across L1 and multiple L2 gas currencies.

Introduces new risks not present in single-chain ecosystems.

• Extended Frontrunning: A searcher on one rollup can frontrun a user's intent that has cross-rollup implications.
• Oracle Manipulation: Attempts to manipulate price oracles on one rollup to trigger liquidations or settlements on another.
• Congestion Spillover: MEV activity on L1, driven by cross-rollup bundles, can increase base layer gas costs for all users.

Solutions are nascent and focus on coordination and fair sequencing.

• Shared Sequencers: A neutral sequencer serving multiple rollups (e.g., Espresso, Astria) can order transactions across them, reducing latency-based MEV.
• Secure Cross-Chain Bridges: Bridges with fast, trust-minimized message passing reduce the arbitrage window.
• MEV-Aware Design: Rollup protocols designing their state finality and bridge mechanisms with cross-domain MEV in mind.

This is the most direct vector, exploiting price differences for the same asset across different rollups or between a rollup and its parent chain. Searchers monitor DEX liquidity pools and execute atomic transactions to capture the spread.

• Example: Buying ETH cheaply on Optimism and selling it at a higher price on Arbitrum within the same block.
• Complexity: Requires bridging assets, making execution dependent on bridge finality times and competing with other searchers.

Attackers monitor lending protocols across rollups to liquidate undercollateralized positions. The challenge and opportunity arise from asynchronous state.

• Mechanism: A position becomes liquidatable on Rollup A. A searcher front-runs the public liquidation transaction on Rollup A while simultaneously hedging the exposure by taking a short position on the same asset in a perpetuals market on Rollup B.
• Risk: This creates a race condition not just within one rollup's mempool, but across multiple domains.

This vector targets the trust assumptions and delay mechanisms of cross-chain bridges. Searchers can extract value by manipulating the ordering of transactions related to asset transfers.

• Deposit Front-running: Observing a large deposit to a bridge's inbox contract on L1 and front-running it with your own transaction on the destination rollup.
• Withdrawal Reordering: As a sequencer or prover, reordering withdrawal transactions to profit from resulting market movements before users receive their funds.

Many DeFi protocols on rollups rely on oracles that pull price data from other chains. Attackers can manipulate the source price on one domain to create a profitable, distorted condition on another.

• Example: Artificially pumping the price of an asset on a DEX on Rollup A (e.g., via a flash loan) just before a price feed updates for a lending protocol on Rollup B, allowing the attacker to borrow against inflated collateral.
• Cross-domain flash loans could amplify the scale of these attacks.

An extension of time-bandit attacks, where a malicious sequencer or validator can reorg a chain to steal MEV. In a cross-rollup context, this becomes more complex and potentially more profitable.

• Mechanism: A validator controlling the sequencing of Rollup A could reorg a block containing a profitable cross-domain arbitrage transaction, replay the arbitrage opportunity themselves, and also capture related latency arbitrage on Rollup B.
• Impact: This violates the safety guarantees users expect from a rollup.

When multiple rollups use a shared sequencer (like Espresso, Astria), it creates a centralized point for cross-domain MEV extraction and new attack vectors.

• Cross-Rollup Bundle Reordering: The sequencer can reorder transactions across multiple rollups in a single block to maximize extractable value from interdependent state changes.
• Privacy Threat: The sequencer has a unified view of pending transactions across all connected rollups, creating the ultimate front-running vantage point unless mitigated by encryption (e.g., threshold encryption).

Cross-rollup MEV is the practice of extracting value by identifying and exploiting inefficiencies between different rollups or between a rollup and its parent chain (L1). Unlike single-chain MEV, it involves atomic arbitrage across disparate state systems, often requiring complex cross-domain transaction bundling to ensure atomicity. The core mechanism relies on latency advantages and sequencer access to front-run or back-run transactions as they finalize in different venues.

Key exploitation methods include:

• Cross-Rollup Arbitrage: Capitalizing on price differences for the same asset (e.g., ETH) on different rollups by buying low on one and selling high on another atomically.
• L1-L2 Settlement Attacks: Manipulating the timing of transaction inclusion between the rollup's sequencer and the L1 settlement layer to profit from withdrawal delays or state root differences.
• Liquidation Cascades: Triggering a liquidation on one rollup to depress an asset's price, then arbitraging that price against other rollups where the asset is still valued higher.

Cross-rollup MEV introduces systemic risks that differ from L1 MEV:

• Fragmented Liquidity: Increases arbitrage opportunities but can lead to persistent price discrepancies, harming user experience.
• Sequencer Centralization Risk: Entities with privileged access to multiple sequencers gain a significant advantage, potentially leading to cartel formation.
• Bridge Vulnerability: Attacks often target the trust assumptions and delay periods of cross-chain bridges, which become critical MEV extraction points.
• Complexity for Users: Sophisticated MEV can make transaction outcomes less predictable for ordinary users across the multi-rollup ecosystem.

The ecosystem is developing several countermeasures:

• Shared Sequencing: Networks like Astria and Espresso propose a neutral, shared sequencer set for multiple rollups to provide atomic cross-rollup inclusion and reduce informational advantages.
• MEV-Aware Bridge Design: Bridges can implement techniques like threshold encryption for transactions or fair ordering protocols to mitigate front-running on cross-domain messages.
• Proposer-Builder Separation (PBS) for Rollups: Adapting L1 PBS designs to rollup sequencers can separate block building from proposing, commoditizing the MEV extraction process.
• Interoperability Standards: Protocols like the Chainlink Cross-Chain Interoperability Protocol (CCIP) aim to provide more secure and predictable message passing, reducing MEV attack surfaces.

Understanding cross-rollup MEV requires familiarity with:

• Maximal Extractable Value (MEV): The foundational concept of profit from transaction reordering, insertion, and censorship.
• Rollup Sequencer: The entity responsible for ordering transactions on a rollup, a central actor in MEV extraction.
• Atomicity: The "all-or-nothing" property essential for cross-domain arbitrage, often enforced by hash-time-locked contracts (HTLCs) or similar mechanisms.
• Data Availability: The guarantee that transaction data is published, crucial for secure bridging and challenging fraudulent state transitions that could be exploited for MEV.

A broader category of MEV that occurs across different blockchain domains or execution environments, which includes Cross-Rollup MEV as a subset.

• Domains: Can involve rollups, sidechains, validiums, and even separate Layer 1 blockchains.
• Complexity: Requires sophisticated coordination and messaging between distinct systems with varying security and finality guarantees.
• Bridges: Often relies on cross-chain bridges or messaging layers to facilitate atomic transactions.

A neutral, decentralized sequencer that processes and orders transactions for multiple rollups. It is a proposed infrastructure component critical for managing Cross-Rollup MEV.

• Function: Provides a single, canonical ordering of transactions across several rollups.
• Benefit: Enables atomic composability and fair MEV distribution across ecosystems.
• Challenge: Must remain decentralized and resistant to censorship to be trust-minimized.

A specific Cross-Rollup MEV strategy where a searcher exploits price differences for the same asset on two different rollups in a single, atomic transaction.

• Mechanism: Uses a cross-rollup bridge or a shared sequencer to ensure the trade either executes fully on both sides or fails entirely.
• Requirement: Depends on fast, reliable cross-domain message passing to eliminate execution risk.
• Example: Buying ETH cheaply on Optimism and selling it on Arbitrum within the same blockchain state update.

Infrastructure that enables the trust-minimized transfer of assets and data between two rollups. It is a primary technical conduit for Cross-Rollup MEV opportunities.

• Types: Can be based on light clients, optimistic verification, or zero-knowledge proofs.
• Latency: Bridge finality time is a critical variable for MEV strategies.
• Security: A compromised bridge can lead to catastrophic MEV exploits, such as stealing all bridged assets during an arbitrage maneuver.