Formalizing MEV: A Theoretical Framework for Blockchain Economic Security ∞ Research

The image showcases a highly detailed, futuristic metallic structure, characterized by interconnected cubic modules and cylindrical conduits, bathed in cool blue and silver light. A shallow depth of field brings the central complex into sharp focus, while the surrounding elements recede into a soft blur, emphasizing the intricate network's vastness

The image showcases a high-tech modular system composed of white and metallic units, connected centrally by intricate mechanisms and multiple conduits. Prominent blue solar arrays are attached, providing an energy source to the structure, set against a blurred background suggesting an expansive, possibly orbital, environment

Briefing

The paper addresses the critical absence of a formal theoretical framework for Maximal Extractable Value (MEV) attacks, which exploit transaction ordering on public blockchains. It introduces a comprehensive, abstract model of blockchains and smart contracts to establish a foundational MEV theory. This breakthrough provides the necessary rigorous basis for developing and proving the security of future blockchain architectures against sophisticated economic manipulations, ensuring more robust and predictable decentralized systems.

The image displays two abstract, dark blue, translucent structures, intricately speckled with bright blue particles, converging in a dynamic interaction. A luminous white, flowing element precisely bisects and connects these forms, creating a visual pathway, suggesting a secure data channel

Context

Before this research, the understanding of MEV largely stemmed from empirical observations of economic attacks on DeFi protocols. The prevailing theoretical limitation involved the absence of a unified, formal model capable of precisely defining and analyzing the complex interplay of transaction ordering, smart contract interactions, and adversarial value extraction. This gap hindered the systematic development of provably secure countermeasures.

A close-up view reveals two abstract, smooth, intertwined forms against a soft grey background. One form is opaque white, while the other is translucent, deep blue, reflecting light and creating dynamic visual depth

Analysis

The core mechanism involves constructing a general, abstract model that formalizes the components of a blockchain and its smart contract execution environment. This model defines adversarial capabilities related to transaction reordering, inclusion, and censorship, allowing for a precise characterization of MEV. The approach fundamentally differs from prior work by moving beyond empirical analysis and ad-hoc countermeasures, instead providing a foundational mathematical language for MEV phenomena. This theoretical framework enables the rigorous derivation of security properties and the design of mechanisms provably resilient to MEV.

A sleek, transparent blue device, resembling a sophisticated blockchain node or secure enclave, is partially obscured by soft, white, cloud-like formations. Interspersed within these formations are sharp, geometric blue fragments, suggesting dynamic data processing

Parameters

Core Concept ∞ Formal MEV Theory
New System/Protocol ∞ Abstract Blockchain Model
Key Authors ∞ Massimo Bartoletti, Roberto Zunino
Publication Venue ∞ arXiv:2302.02154
Latest Version Date ∞ May 25, 2025

The image showcases a detailed view of a translucent, frosted white and vibrant blue mechanical component, highlighting its intricate internal structure and smooth exterior. The focus is on the interplay of light and shadow across its precise, engineered surfaces, with a prominent blue ring providing a striking color contrast

Outlook

This foundational theory unlocks new avenues for developing provably secure blockchain protocols and smart contracts, shifting from reactive countermeasures to proactive design. It enables the formal verification of MEV-resistant mechanisms, leading to more equitable and predictable decentralized finance (DeFi) ecosystems. Future research can build upon this abstract model to explore the full landscape of MEV, including cross-chain and multi-layer implications, fostering innovations in protocol design and economic security.

A large, faceted blue crystalline structure, reminiscent of a massive immutable ledger shard, forms the central focus, with a luminous full moon embedded within its depths. White snow or frost accents the crystal's contours, suggesting cold storage for digital assets

Verdict

This research establishes the indispensable theoretical bedrock for understanding and mitigating Maximal Extractable Value, fundamentally enhancing the security principles of blockchain technology.

Signal Acquired from ∞ arxiv.org