MEV formalization involves the rigorous definition and mathematical modeling of Miner Extractable Value (MEV) within blockchain systems. This process seeks to precisely describe how validators or miners can profit by ordering, censoring, or inserting transactions within blocks. Formalization aids in understanding the economic incentives and potential risks associated with MEV. It provides a structured approach to analyzing and mitigating its impact on network fairness and efficiency.
Context
MEV formalization is a central area of academic research and protocol development in the blockchain space, particularly concerning transaction ordering and network security. Debates often focus on designing mechanisms that can reduce or redistribute MEV, such as proposer-builder separation or fair sequencing algorithms. Future work aims to implement these formal models into practical solutions to limit adverse effects of MEV on user experience and network integrity, fostering a more equitable digital asset environment.
A new axiomatic framework formalizes Maximal Extractable Value using an abstract blockchain model, enabling provable security guarantees for mechanism design.
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