Briefing
This paper addresses the critical absence of formal theoretical foundations for Maximal Extractable Value (MEV), a class of economic attacks impacting public blockchains. It introduces a formal theory of MEV, grounded in a general, abstract model of blockchains and smart contracts, to provide a rigorous framework for understanding these pervasive attacks. This foundational breakthrough enables the development of proofs of security against MEV, fundamentally reshaping how blockchain architectures can achieve resilience and fairness in transaction processing.
Context
Prior to this research, the phenomenon of Maximal Extractable Value largely existed as an empirically observed problem, with adversaries extracting value through transaction reordering, insertion, or dropping. While its detrimental effects on DeFi protocols and network integrity were well-documented, a comprehensive, abstract theoretical framework for MEV remained underdeveloped. This prevailing limitation hindered the systematic analysis and robust mitigation of these complex economic manipulations within decentralized systems.
Analysis
The core idea centers on developing a formal theory of MEV by constructing a general, abstract model that encapsulates the essential components of blockchains and smart contracts. This model precisely defines the mechanisms by which value can be extracted by block producers or other privileged actors who manipulate transaction ordering. By formalizing MEV within this abstract framework, the research moves beyond empirical observation, allowing for a rigorous, mathematical analysis of attack vectors and the systematic design of countermeasures. This approach provides a foundational understanding, enabling a shift from reactive patching to proactive, theoretically sound security solutions.
- Core Concept → Maximal Extractable Value (MEV)
- New Model → Formal Theory of MEV
- Key Authors → Bartoletti, M. et al.
- Publication Platform → arXiv
- Publication Date → 2023-02-04 (v1), 2025-05-25 (v5)
- Primary Focus → Economic Attacks, Blockchain Security
Outlook
This formalization of MEV provides a critical lens for future research, allowing for the systematic design and verification of MEV-resistant blockchain protocols and smart contracts. It lays the groundwork for developing new consensus mechanisms and transaction ordering policies that inherently disincentivize or prevent malicious value extraction. The theory will empower developers and architects to build more secure, equitable, and predictable decentralized applications, unlocking new paradigms for fair and robust on-chain economic activity in the coming years.
Signal Acquired from → arXiv.org
