Briefing
Maximal Extractable Value (MEV) presents a pervasive class of economic attacks on public blockchains, where adversaries manipulate transaction ordering to extract significant value, often at the expense of users. Despite the widespread empirical evidence of MEV’s detrimental impact on network fairness and user experience, a robust, foundational theoretical framework to formally understand and combat these manipulations has remained insufficiently established. This research introduces a formal theory of MEV, grounded in a general, abstract model of blockchain and smart contract interactions, which precisely defines the mechanisms of value extraction. This foundational theoretical framework enables the rigorous construction of security proofs against MEV attacks, thereby paving the way for the design of more resilient and equitable blockchain architectures.
Context
Prior to this research, the understanding of Maximal Extractable Value (MEV) largely relied on empirical observations and ad-hoc analyses of specific attack vectors like front-running or sandwiching. While the practical impact and economic significance of MEV were well-documented across various decentralized finance (DeFi) protocols, a comprehensive, abstract theoretical framework capable of formally describing and predicting all forms of value extraction across diverse blockchain designs was notably absent. This theoretical gap hindered the development of universally applicable, provably secure mitigation strategies, leaving blockchain systems vulnerable to economically driven manipulations without a clear, foundational understanding of their underlying mechanics.
Analysis
The paper’s core mechanism is the construction of a novel, abstract mathematical model that formally defines Maximal Extractable Value (MEV) within the context of a generalized blockchain and smart contract system. This model fundamentally differs from previous approaches by moving beyond empirical descriptions of specific MEV strategies. Instead, it provides a universal language to express how transaction reordering, insertion, and censorship can lead to value extraction.
By abstracting away implementation-specific details, the model allows for a rigorous, protocol-agnostic analysis of MEV, enabling the identification of underlying economic vulnerabilities and the formal derivation of security properties against such attacks. This foundational shift from descriptive analysis to formal modeling empowers the development of provably secure blockchain designs.
Parameters
- Core Concept ∞ Formal MEV Theory
- Key Mechanism ∞ Abstract Blockchain Model
- Authors ∞ Massimo Bartoletti, Roberto Zunino
- Publication Date ∞ May 25, 2025 (Revised)
- Source ∞ arXiv:2302.02154
- Subject Area ∞ Cryptography and Security
Outlook
This foundational work on MEV theory opens several critical avenues for future research, including the development of new, provably secure consensus mechanisms and transaction ordering protocols designed to inherently resist value extraction. In the next 3-5 years, this theoretical framework could enable the creation of next-generation DeFi protocols with stronger economic security guarantees, leading to fairer and more predictable transaction environments for users. Furthermore, it provides a rigorous basis for formally verifying the MEV-resistance of existing and nascent blockchain architectures, thereby accelerating the adoption of more robust decentralized systems in real-world applications.
Verdict
This paper establishes a critical theoretical bedrock for understanding and combating Maximal Extractable Value, fundamentally advancing the foundational principles of blockchain economic security.