https://pmcgoohan.medium.com/mev-do-this-beb2754bca63

(This article is a response to Philip Daian’s blog post ‘Mev… wat do?’)

“MEV is not a fundamental law of the universe, it is the exploitation of a network vulnerability that is our responsibility as developers to fix”

Dear Phil,

I wanted to respond to your blog post.

Debating the issue of Miner Extractable Value (MEV) is vital, so I’ll go through your points in turn:

On Cryptographic transcriptability

“All distributed systems that can function as currencies must contain the key property of auditability, or the ability to validate system state transitions and/or user actions”

A well designed content consensus layer is publicly auditable. In my example the behaviour of all participants is visible and block content is fully recreatable from it.

On Interoperability under heterogeneous trust

“even if ETH had 0 MEV, there would likely be MEV available arbitraging Binance Smart Chain with ETH, especially available to those validating both”

Absolutely this will always exist, and this kind of arbitrage is vital to price discovery. I would never suggest that it is possible or even desirable to avoid it.

MEV is not simple latency arbitrage. MEV is when you see a transaction in the pool that the originator cannot retract and insert your transactions before or after it or both.

There is no transfer of information in this case, no greater efficiency, no invisible hand of the market. It is the base extortion of a powerless victim by a privileged one. MEV is not a fundamental law of the universe, it is the exploitation of a network vulnerability that is our responsibility as developers to fix.

By selling block content to the highest bidder, a new attack vector has been inadvertently created: order flow manipulation. This was unworkable when content creation was fragmented between miners, but now the richest can pay to trade against the poorest when it suits them, as well as hoovering up all the usual MEV.

There is currently no visibility of this kind of order flow manipulation in MEV-Inspect.

Permissionlessness

“in Uniswap, without the MEV provided arbitraging markets with external/centralized exchanges and fellow dexes, the price would not reflect the market and not provide a useful trading product for users”