Formal MEV Theory for Blockchain Security Analysis → Research

The image features an abstract, translucent blue structure with intricate, interconnected internal patterns, partially covered by white, textured material resembling frost or snow. This dynamic form is set against a blurred background of metallic grey and silver elements, suggesting a technological infrastructure

A polished metallic cylindrical object, characterized by its ribbed design and dark recessed sections, is partially covered by a vibrant blue, bubbly substance. The precise engineering of the component suggests a core blockchain mechanism undergoing a thorough verification process

Briefing

This paper addresses the critical absence of a formal theoretical framework for Maximal Extractable Value (MEV) in public blockchains, a phenomenon empirically known for its detrimental impact on decentralized finance (DeFi) protocols and user experience. It introduces a comprehensive, abstract model of blockchains and smart contracts to establish a foundational theory of MEV. This theoretical groundwork provides the necessary basis for developing rigorous proofs of security against various MEV attacks, thereby advancing the integrity and stability of future blockchain architectures.

A detailed close-up reveals an abstract, three-dimensional structure composed of numerous interconnected blue and grey electronic circuit board components. The intricate design forms a hollow, almost skeletal framework, showcasing complex digital pathways and integrated chips

Context

Prior to this research, Maximal Extractable Value manifested as a significant, empirically observed problem within public blockchain networks, particularly impacting DeFi. The prevailing theoretical limitation centered on the lack of a formal, abstract model to systematically define and analyze MEV. This absence hindered the development of provably secure countermeasures against transaction reordering, insertion, and exclusion attacks, leaving blockchain systems vulnerable to economic exploitation.

A clear cubic prism is positioned on a detailed blue printed circuit board, highlighting the intersection of physical optics and digital infrastructure. The circuit board's complex traces and components evoke the intricate design of blockchain networks and the flow of transactional data

Analysis

The core idea involves constructing a formal theory of MEV by developing a general, abstract model of blockchains and smart contracts. This model provides a precise language for describing the interactions between block producers and transaction orderings, allowing for the systematic identification and quantification of value extraction opportunities. It fundamentally differs from previous empirical observations by offering a foundational, mathematical framework. This new primitive establishes a rigorous basis for analyzing the economic attacks that define MEV, enabling the design of security mechanisms with verifiable guarantees.

Core Concept → Formal MEV Theory
New System/Model → Abstract Blockchain and Smart Contract Model
Key Authors → Bartoletti, M. and Zunino, R.
Publication Status → To appear in Financial Cryptography and Data Security, LNCS, Springer, 2025

A detailed, angled shot presents a robust blue and silver device, enveloped by a dense layer of white foam bubbles. The central silver cylindrical component, with its precise machining and internal hexagonal structure, is clearly visible amidst the effervescence, contrasting with the smooth blue casing that bears subtle metallic lettering

Outlook

This research establishes a critical foundation for the systematic analysis and mitigation of MEV, a pervasive challenge in decentralized systems. The formal theory opens new avenues for designing provably secure consensus algorithms and transaction ordering mechanisms, leading to more equitable and robust blockchain ecosystems. Its potential real-world applications include the development of MEV-resistant Layer 2 solutions and novel auction designs for block space, enhancing overall network fairness and security within the next three to five years.

This foundational work provides the indispensable theoretical rigor required to understand, quantify, and ultimately counteract Maximal Extractable Value, profoundly strengthening the security principles of blockchain technology.

Signal Acquired from → arxiv.org