MEV Share Protocol

The MEV Share Protocol is a set of smart contracts and off-chain infrastructure that creates a transparent marketplace for MEV opportunities. It allows regular users to signal their transaction intent to a network of competitive searchers (specialized bots) by submitting transactions to a public mempool. In return for revealing their transaction flow, users receive a guaranteed share of any MEV profits generated from bundling their transactions, a process known as backrunning or coincidence of wants. This shifts value from exclusive, private mempools back to the public domain and its users.

At its core, the protocol operates on a commit-reveal scheme. A user's transaction is first submitted as an intent, containing encrypted details. Searchers then compete to propose the most profitable bundle that includes this intent. Once a winning bundle is selected by the protocol's block builder, the user's transaction details are revealed and executed on-chain. This mechanism ensures user privacy during the auction while enabling fair competition. The protocol is often integrated with a Flashbots SUAVE-enabled block builder to ensure credible neutrality and censorship resistance.

Key technical components include the User Operation model for expressing intents, a Searcher API for submitting bundles, and smart contracts that enforce the auction rules and distribute payments. A critical innovation is the use of conditional transactions, where a searcher's profit is contingent on the user's transaction succeeding, aligning incentives. The protocol also introduces the concept of MEV-Share orders, which are standardized structures for different MEV opportunities like arbitrage or liquidations.

The primary benefit is the redistribution of MEV from professional searchers and validators to everyday Ethereum users. By participating, users can receive gas subsidies or even direct payments, effectively reducing their net transaction costs. For the ecosystem, it promotes MEV democratization, increases transparency by reducing opaque private transaction flow, and can help mitigate negative externalities like time-bandit attacks by making certain MEV opportunities less predictable and exclusive.

The protocol represents a significant evolution from earlier MEV mitigation systems like Flashbots Auction. While Flashbots protected users from frontrunning, MEV Share actively enables them to profit from the inevitable MEV their transactions create. It is a foundational primitive for a more equitable MEV supply chain, paving the way for applications where users can automatically opt into sharing value from their DeFi interactions, NFT trades, or other on-chain actions.

The MEV Share Protocol is a permissionless, open-source system built on Ethereum that introduces a new transaction flow to democratize access to MEV (Maximal Extractable Value). At its core, it allows users to opt into sharing partial details of their pending transactions—specifically the transaction calldata and the hash of the address—with a network of competitive searchers via a shared mempool. This creates a marketplace where searchers can craft bundles that include these user transactions alongside their own profit-extracting logic, competing to offer the best backrun or other MEV opportunities back to the user in the form of enhanced transaction execution, such as fee refunds or direct payments.

The protocol's operation relies on a specialized entity called the Matchmaker, which is operated by Flashbots. The Matchmaker receives user-intent transactions, strips them of sensitive information like the full sender address to preserve privacy, and broadcasts these sanitized intents to searchers. Searchers then analyze these intents and submit their proposed bundles, which must include the original user transaction, back to the Matchmaker. The Matchmaker evaluates all incoming bundles against a set of rules, selecting the one that provides the maximum economic benefit for the user. The winning bundle is then forwarded to a block builder for inclusion in the next Ethereum block.

A key innovation of MEV Share is its use of commit-reveal schemes and conditional transaction logic to ensure fairness and security. User transactions can include a conditional flashbots directive that specifies requirements for their execution, such as a minimum payment from the searcher. The searcher's bundle, which fulfills these conditions, is only revealed and executed if it lands in a canonical block. This mechanism prevents frontrunning and guarantees that users only transact under their specified, improved terms, effectively allowing them to 'sell' the option value of their transaction's predictable outcome to the highest bidder in the MEV marketplace.

By design, MEV Share creates a more equitable distribution of the value extracted from blockchain activity. Instead of searchers and validators capturing all MEV through techniques like sandwich attacks, a portion is returned to the end-user who initiated the opportunity. This realigns economic incentives, reduces the negative externalities of toxic MEV, and enhances the overall user experience by potentially lowering net transaction costs. The protocol represents a shift from opaque extraction to a transparent, auction-based system where value is shared.

The MEV Share Protocol was developed by Flashbots, the same research and development collective that created the pivotal MEV-Boost middleware for Ethereum validators. Its name derives from its core function: to enable the "sharing" of Maximal Extractable Value (MEV) opportunities and their profits among a broader set of participants, primarily transaction senders and searchers, rather than concentrating them solely with block proposers. This represented a philosophical shift from MEV-Boost's focus on fair access to block space (who builds the block) to a model focused on fair value distribution (who benefits from the value in the block).

Etymologically, the protocol's name is a compound of the foundational concept MEV and the action Share. It formalizes the idea of a transaction flow marketplace where users can intentionally expose their transaction intents—through mechanisms like calldata hints or conditional bundles—to competitive searchers. This design creates an auction for transaction inclusion and ordering that occurs before a block is built, allowing users to capture a portion of the MEV their transactions generate in the form of refunds or direct payments, a concept often termed MEV rebates.

The protocol's architecture is a direct descendant of Flashbots' earlier work on the searcher-builder-proposer separation model. It essentially extends the communication layer of MEV-Boost, introducing new message types and rules for a confidential mempool. This allows transactions with shared hints to be visible only to registered searchers within the Flashbots network, protecting them from frontrunning on the public mempool while still enabling competitive bidding for the right to include and order them alongside profitable arbitrage or liquidation bundles.

A key historical driver for MEV Share's development was the growing scrutiny on the negative externalities of MEV, such as sandwich attacks against ordinary users. By providing a structured, transparent channel for value redistribution, the protocol aims to align incentives, making predatory strategies less profitable relative to cooperative ones. Its launch marked a significant experiment in using market design to mitigate a core cryptographic-economic problem, evolving the Ethereum ecosystem from merely managing MEV towards democratizing its proceeds.