Definition ∞ MEV bounds refer to limits or constraints placed on the maximum extractable value from a blockchain. Maximum Extractable Value (MEV) represents the profit miners or validators can gain by arbitrarily including, excluding, or reordering transactions within a block. MEV bounds are mechanisms or protocol designs aimed at restricting the extent of this value extraction to prevent negative impacts like increased transaction costs, network instability, or unfair user outcomes. These bounds seek to mitigate the economic incentives for harmful MEV practices.
Context ∞ The state of MEV bounds is a central topic in blockchain protocol design, particularly for proof-of-stake networks where validators have significant control over block construction. Key discussions revolve around designing effective mechanisms to limit MEV without compromising decentralization or network efficiency. Future developments include research into various MEV-mitigation strategies, such as proposer-builder separation and encrypted mempools, to ensure more equitable and stable blockchain operation.
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