MEV centralization risk refers to the potential for the extraction of Maximal Extractable Value (MEV) to lead to an undesirable concentration of power among a few network participants. MEV is the profit that can be gained by ordering, censoring, or inserting transactions within a block. If MEV extraction becomes highly centralized, it could compromise the decentralization and censorship resistance of a blockchain. This risk threatens the fundamental principles of distributed ledger technology.
Context
MEV centralization risk is a major topic of concern and research within the blockchain community, particularly for proof-of-stake networks. News reports frequently highlight instances where large validators or specialized block builders capture a disproportionate share of MEV, leading to debates about protocol design solutions like Proposer-Builder Separation (PBS). Mitigating this risk is seen as essential for preserving the long-term integrity and fairness of decentralized systems.
An economic model reveals that Proposer-Builder Separation, using Execution Tickets, concentrates MEV extraction among high-capital buyers, fundamentally challenging decentralization.
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