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MEV Deep Dive .pptx
The document discusses the complexities and opportunities within the MEV (Miner Extractable Value) space, highlighting how transaction manipulation by miners and validators can yield significant profits. It addresses challenges in building MEV-capturing solutions and presents various potential projects, including improved MEV relays and cross-chain MEV networks. The summary emphasizes that while MEV presents significant opportunities, developing effective solutions requires overcoming substantial technical hurdles.
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MEV Deep Dive .pptx
- 1. Not Another MEVPresentation A deep dive into the opportunities, challenges and ambitious ideas in the MEV space Jesus Rodriguez IntoTheBlock
- 2. Agenda ● Rapid MEVdeep dive ● Mitigating MEV ● Building for MEV ● MEV opportunities Not Another MEV Presentation
- 3. An Update AboutITB…
- 4. New Live Customers Benzinga NotAnother MEV Presentation
- 5. New Live Customers Conio NotAnother MEV Presentation
- 6. New Live Customers Pointbreak NotAnother MEV Presentation
- 7. Upcoming Releases ● NewNFT analytics release ● Avalanche analytics ● Fantom analytics ● New public websites including the first public preview of the ITB DeFi quant platform Not Another MEV Presentation
- 8. A Not-So-Gentle Introto MEV
- 9. From Miner toMaximal Not Another MEV Presentation Some MEV Definitions “MEV is the total amount of Ether miners can extract from manipulation of transactions within a given timeframe, which may include multiple blocks’ worth of transactions” “MEV is a measure of the profit a miner (or validator, sequencer, etc.) can make through their ability to arbitrarily include, exclude, or re-order transactions within the blocks they produce.” “MEV is a measure of the total value that can be extracted permissionlessly (i.e. without any special rights) from transaction ordering.”
- 10. In PoW blockchainsminers are incredibly influential in the transaction ordering process. In PoS blockchains, that power has transferred to validators… Not Another MEV Presentation
- 11. The Miner Versionof MEV Not Another MEV Presentation
- 12. Flashbots MEV-Geth Becamethe Dominant Solution for Ethereum MEV Not Another MEV Presentation
- 13. ⚠️ Controversial idea⚠️ MEV is the blockchain version of paying for order flow Not Another MEV Presentation
- 14. The Paying forOrder Flow Analogy Not Another MEV Presentation
- 15. Understanding the modernMEV supply chain… Not Another MEV Presentation
- 16. The Components ofMEV Not Another MEV Presentation
- 17. The traditional MEVsupply chain assumes a trusted relationship between the block proposer and the validator… Not Another MEV Presentation
- 18. Proposer Builder Separation NotAnother MEV Presentation
- 19. Flashbots introduced MEV-Boostas an initial/partial implementation of PBS Not Another MEV Presentation
- 20. MEV-Boost Not Another MEVPresentation
- 21. Searchers Not Another MEVPresentation Goal Discover new opportunities and send them to a block builder
- 22. Block Builders Goal Receive transactionsand try to build the most profitable valid block Not Another MEV Presentation
- 23. Relays Not Another MEVPresentation Goal Receives the blocks and sends the headers to a validator
- 24. Validators Not Another MEVPresentation Goal Propose the valid block to the network
- 25. Notable Relayers inEthereum Post-Merge Not Another MEV Presentation
- 26. MEV architectures areway more advanced and competitive in Ethereum but exist in most blockchains… Not Another MEV Presentation
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- 28. ⚠️ Controversial idea⚠️ MEV is an important element of the financial value cycle in any blockchain Not Another MEV Presentation
- 29. Bad MEV vs.Good MEV Not Another MEV Presentation
- 30. Mitigating MEV Not AnotherMEV Presentation Node Level Protocol Level Consensus Level MEV Mitigation
- 31. Factors that HelpMitigate MEV Not Another MEV Presentation Less MEV MEV Aware DApps High Cost of Extraction Speed
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- 33. Building MEV-capturing solutionsis brutally hard Not Another MEV Presentation
- 34. What to Build? NotAnother MEV Presentation
- 35. Development Complexity Not AnotherMEV Presentation Searchers Block Builders Relays
- 36. Traditional MEV Opportunities NotAnother MEV Presentation
- 37. More Interesting Opportunities NotAnother MEV Presentation MEV Opportunity Idea CeFi-DeFi Arbs Search DeFi opportunities that arbitrage specific CeFi positions Cross-Chain Arbs Search DeFi opportunities in one chain that arbitrage opportunities in other chains Non-Trivial Arbs Increase the complexity of the target opportunities
- 38. Concrete vs. GenericMEV Searchers Not Another MEV Presentation Concrete Searcher Searches for alpha based on a specific DApp and trade logic Generic Searcher Searches for opportunities based on generic trades and smart contract property testing
- 39. Concrete vs. GenericMEV Searchers Not Another MEV Presentation Capability Concrete Generic Scope Narrow Broad Alpha High Medium Maintenance High Low Opportunities Beyond DeFi Yes No
- 40. General Notes AboutMEV Building ● Trivial opportunities are ultra competitive ● Focus on more sophisticated opportunities ● Cross chain and CeFi-DeFi arbitrages are interesting areas to explore Not Another MEV Presentation
- 41. Some Interesting IdeasAbout MEV Opportunities
- 42. Four Ideas toConsider Not Another MEV Presentation Improved MEV Relays Flashbots for Non- Ethereum Chains Cross-Chain MEV Network MEV-Aware Protocols
- 43. Improved MEV Relays NotAnother MEV Presentation Problem Today, most relays structure blocks based on transaction compensation Opportunity Building new forms of relays that incorporate more interesting financial incentives for validators
- 44. Not Another MEVPresentation Problem Today, Flashbots remains the dominant MEV framework but is constrained to the Ethereum chain Opportunity Building for-profit Flashbots like frameworks for other blockchains Flashbots for Non-Ethereum Chains
- 45. Not Another MEVPresentation Problem Today, MEV is captured for specific blockchains Opportunity Build a Flashbot-like market that can coordinate validators for different blockchains Cross Chain MEV Network
- 46. Not Another MEVPresentation Problem Today, most DeFi protocols do not incorporate logic to mitigate MEV Opportunity Build new DeFi protocols that are aware of the MEV conditions in the network can pass the value to its users MEV-Aware Protocols
- 47. Summary ● MEV isa feature, not a bug of blockchain runtimes ● The MEV supply chain is complex and evolving ● There are plenty of opportunities in the MEV space but it is really hard to build for it ● There are some interesting opportunities that can help shape the future of MEV Not Another MEV Presentation
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