MEV Evolution

MEV extraction grew from academic curiosity to industrial operation. Billions extracted annually through arbitrage, liquidations, sandwich attacks. The scale forced the ecosystem to respond.

The early days were simple. See a profitable transaction in mempool, front-run it. First-come-first-served ordering made this trivial. Naive users got eaten alive.

Flashbots changed the game. Private mempools, sealed-bid auctions, MEV democratization of sorts. The extraction became more efficient but also more structured. At least the chaos reduced.

PBS separated block building from proposing. Specialized builders compete on block value. Proposers just pick the highest bid. Cleaner incentives, professionalized extraction.

The philosophical question remains. Is MEV theft or arbitrage? Are we optimizing a broken system or legitimizing value extraction from users? The answer probably depends on the specific MEV type.

MEV minimization through better protocols is the ideal. Batch auctions, encrypted mempools, MEV-aware DEX designs. Reduce the extractable value at the source. Some progress here but MEV finds a way.