Formalizing MEV for Provable Blockchain Security → Research

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Briefing

This foundational research addresses the pervasive challenge of Maximal Extractable Value (MEV) by introducing a comprehensive formal theory. The paper develops a general, abstract model of blockchains and smart contracts, which serves as a rigorous basis for understanding and quantifying MEV. This theoretical framework enables the construction of provable security guarantees against MEV attacks, offering a critical advancement for designing more robust and equitable decentralized systems. The work’s most important implication is its capacity to shift MEV mitigation from heuristic approaches to formally verifiable solutions, thereby enhancing the fundamental security and fairness of future blockchain architectures.

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Context

Prior to this research, Maximal Extractable Value (MEV) presented a significant, yet theoretically underexplored, economic attack vector across public blockchains. Empirical observations highlighted the detrimental impact of transaction reordering, insertion, and censorship by block producers on DeFi protocols and users. The prevailing theoretical limitation centered on the absence of a formal, abstract model capable of systematically defining, analyzing, and proving security properties related to MEV across diverse blockchain and smart contract designs.

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Analysis

The core idea introduces a formal theory of MEV through a general, abstract model of blockchain and smart contract interactions. This model precisely defines the conditions under which value extraction occurs, moving beyond informal descriptions. The theory establishes concepts such as “universal MEV” and “MEV-free” states, allowing for the quantitative assessment of a system’s susceptibility to these economic attacks. It fundamentally differs from previous approaches by providing a mathematical framework to reason about MEV, offering a basis for constructing provable security guarantees for new protocol designs.

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Parameters

Core Concept → Formal Theory of Maximal Extractable Value
New System/Protocol → Abstract Blockchain and Smart Contract Model
Key Authors → Bartoletti, M. Zunino, R.
Key Properties → Universal MEV, MEV-Free States, Security Proofs
Publication Venue → Financial Cryptography, 2025

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Outlook

This formal theory of MEV unlocks new avenues for rigorous protocol design and analysis, moving towards provably MEV-resistant systems. It enables the development of future blockchain architectures with integrated fair ordering mechanisms and more secure proposer-builder separation (PBS) designs. The research provides a crucial framework for academics and engineers to quantify and mitigate MEV, fostering a more transparent and equitable on-chain environment for all participants over the next three to five years.

This research provides the indispensable theoretical bedrock for systematically understanding and ultimately mitigating Maximal Extractable Value, a critical step towards realizing truly robust and fair decentralized economies.

Signal Acquired from → arXiv.org