Formalizing Maximal Extractable Value for Provable Blockchain Security ∞ Research

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Briefing

This paper addresses the critical absence of a formal definition for Maximal Extractable Value (MEV) by proposing a comprehensive theoretical framework. It introduces an abstract model for blockchains and smart contracts, coupled with an axiomatization of adversarial knowledge that allows for the precise deduction of exploitable transaction sequences. This foundational breakthrough enables the formal verification of smart contract security against MEV attacks, thereby establishing a rigorous basis for designing more resilient and equitable blockchain architectures.

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Context

Prior to this research, the understanding of Maximal Extractable Value (MEV) was largely empirical, focusing on identifying heuristics for value extraction, quantifying its impact, or developing mitigation strategies. However, a fundamental theoretical limitation persisted ∞ the lack of a rigorous, formal definition of MEV itself. This deficiency made it impossible to formally prove whether a smart contract or blockchain protocol was genuinely MEV-free, hindering the development of provably secure decentralized systems, a stark contrast to the foundational principles of modern cryptography.

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Analysis

The paper’s core mechanism is the introduction of a formal theory of MEV, grounded in an abstract model of blockchains and smart contracts. This model precisely defines MEV as the maximal gain an adversary can achieve by manipulating transaction order, insertion, or dropping. A key innovation is the axiomatization of adversarial knowledge, which formally describes how adversaries combine their private information with public mempool data to deduce and execute profitable transaction sequences. This approach fundamentally differs from previous empirical or heuristic-based methods by providing a mathematical framework to analyze and prove security properties, rather than merely observing or reacting to MEV phenomena.

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Parameters

Core Concept ∞ Maximal Extractable Value Formalization
Key Authors ∞ Bartoletti, M. and Zunino, R.
Publication Venue ∞ arXiv
Version ∞ v5
Date of Latest Version ∞ May 25, 2025

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Outlook

This theoretical framework establishes a critical foundation for future research into provably secure blockchain protocols. It opens new avenues for developing formal verification tools capable of assessing smart contract vulnerability to MEV attacks and for designing MEV-resistant consensus mechanisms. In the next 3-5 years, this theory could unlock the creation of blockchain architectures that offer stronger guarantees against economic exploitation, fostering more equitable transaction ordering and enhancing overall network decentralization and transparency. It provides the essential conceptual tools for building a more robust and fair decentralized ecosystem.

This research provides the indispensable formal bedrock for understanding and mitigating Maximal Extractable Value, fundamentally advancing the provable security of blockchain protocols.

Signal Acquired from ∞ arXiv.org