Briefing
This foundational paper introduces a formal theory of Maximal Extractable Value (MEV), addressing the critical gap in established theoretical frameworks for understanding these pervasive economic attacks on public blockchains. It proposes a general, abstract model of blockchain operations and smart contract interactions. This rigorous theoretical basis allows for the development of security proofs against MEV attacks, moving beyond empirical observations to provide a systematic framework for designing more robust and secure blockchain architectures. The theory provides a pathway for protocols to mitigate the detrimental effects of MEV on user experience and network integrity.
Context
Prior to this research, Maximal Extractable Value (MEV) was primarily understood through empirical observation of economic attacks. Adversaries reorder, drop, or insert transactions within blocks to extract value from smart contracts, impacting mainstream DeFi protocols. The prevailing theoretical limitation centered on the absence of a comprehensive, formal model to systematically analyze and quantify these attacks, hindering the development of provably secure countermeasures against such sophisticated economic exploitation.
Analysis
The core idea centers on developing a formal theory of MEV through an abstract model of blockchains and smart contracts. This model precisely defines the mechanisms by which value extraction occurs, encompassing transaction reordering, insertion, and censorship. The research fundamentally differs from previous approaches by shifting from anecdotal evidence and ad-hoc mitigation strategies to a rigorous, mathematical framework. This new primitive establishes the necessary theoretical groundwork for constructing proofs of security, allowing protocol designers to reason about MEV resilience with formal guarantees.
- Core Concept → Maximal Extractable Value (MEV) Formalization
- Proposed Model → Abstract Blockchain and Smart Contract Model
- Key Authors → Bartoletti, M. and Zunino, R.
- Problem Addressed → Lack of Theoretical MEV Foundation
- Primary Application → Security Proofs Against MEV Attacks
Outlook
This formalization of MEV lays essential groundwork for future research into provably secure blockchain designs. It enables the development of new protocol architectures and transaction ordering mechanisms inherently resistant to economic manipulation. Real-world applications could include more equitable decentralized exchanges, resilient lending platforms, and ultimately, a more predictable and trustworthy on-chain environment for all participants within the next three to five years.
Signal Acquired from → arxiv.org
