Formalizing MEV with Abstract Blockchain Models for Robust Security Analysis → Research

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Briefing

Maximal Extractable Value (MEV) presents a significant and empirically widespread problem in public blockchains, where adversaries exploit transaction ordering to extract value, yet a robust theoretical foundation for these attacks has been lacking. This research introduces a formal theory of MEV, grounded in a general, abstract model of blockchains and smart contracts, which provides the necessary framework for precise analysis. This theoretical framework enables the development of provable security measures against MEV attacks, thereby enhancing the fundamental integrity and economic fairness of future blockchain architectures.

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Context

Despite the growing real-world impact and empirical observation of Maximal Extractable Value (MEV), its theoretical underpinnings have remained insufficiently established. This limitation has hindered systematic analysis and the development of provably secure countermeasures. Prior research often focused on specific instances or empirical observations rather than a universal, abstract model capable of encompassing the full scope of MEV phenomena.

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Analysis

This paper proposes a formal theory of MEV by constructing a general, abstract model of blockchains and smart contracts. This model captures the essential elements of transaction processing, block construction, and adversary capabilities, including the ability to reorder, drop, or insert transactions. By formalizing these interactions, the research provides a precise language to define and analyze MEV, moving beyond anecdotal or empirical observations. This foundational shift allows for the rigorous derivation of security properties and the design of protocols that are provably resilient to MEV attacks, a significant departure from ad-hoc mitigation strategies.

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Parameters

Core Concept → Formal MEV Theory
Key Authors → Bartoletti, M. et al.
New Model → Abstract Blockchain Model

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Outlook

This formal theory establishes a robust foundation for future research into MEV. It opens avenues for designing and formally verifying MEV-resistant consensus mechanisms and smart contract designs. In the next 3-5 years, this could lead to blockchain architectures with provably fairer transaction ordering, reduced economic exploitation of users, and more predictable on-chain market dynamics, fostering greater trust and stability in decentralized finance and other blockchain applications.

This research provides the essential theoretical bedrock for understanding and ultimately mitigating Maximal Extractable Value, fundamentally enhancing the provable security and economic integrity of decentralized systems.

Signal Acquired from → arXiv.org