Briefing
This paper rigorously demonstrates that Maximal Extractable Value (MEV) through rampant onchain searching, or “spam,” constitutes the primary economic bottleneck for blockchain scaling, consuming over 50% of gas on high-throughput networks. It proposes a novel MEV auction design incorporating programmable privacy and explicit bidding to mitigate this systemic inefficiency. This new theoretical framework asserts that optimizing blockspace utilization, rather than merely increasing raw throughput, is paramount for realizing genuine scaling benefits and fostering equitable decentralized systems. The ultimate implication is a fundamental shift in blockchain architecture towards MEV-aware resource allocation.
Context
Prior to this research, the prevailing discourse around blockchain scalability centered on technical throughput enhancements such as sharding, rollups, and consensus optimizations. The assumption was that increasing raw capacity would directly translate into lower fees and greater utility for users. However, the pervasive economic forces of MEV were largely considered a secondary concern, primarily impacting transaction ordering fairness rather than overall network capacity.
Analysis
The core insight identifies a “spam auction” where searchers blindly probe for MEV opportunities on-chain, consuming vast amounts of gas due to transaction expressivity, private mempools, cheap fees, and the absence of efficient bidding mechanisms. The proposed solution involves two complementary components. Programmable privacy, often facilitated by Trusted Execution Environments (TEEs), grants searchers necessary visibility into transaction flow while verifiably restricting frontrunning or data leakage.
Concurrently, explicit bidding allows searchers to directly compete for precise transaction inclusion and ordering, moving beyond wasteful gas consumption as the proxy for preference. This fundamentally shifts MEV extraction from an inefficient, congesting process to a structured, resource-optimized market.
Parameters
- Core Concept ∞ MEV as Scaling Limit
- New System/Protocol ∞ Programmable Privacy, Explicit Bidding
- Key Authors ∞ Robert Miller (Flashbots)
- Empirical Evidence ∞ OP-Stack Rollup Data
- Proposed Technology ∞ Trusted Execution Environments (TEEs)
Outlook
This research reorients the scaling roadmap, emphasizing efficient blockspace utilization over raw throughput. Future work will refine programmable privacy mechanisms and explore the optimal design of explicit MEV auctions, considering the inherent trade-offs with block times. This theoretical shift promises to unlock novel decentralized applications requiring abundant, low-cost blockspace, fostering a more equitable and performant on-chain environment for all participants.
Verdict
This paper delivers a foundational re-evaluation of blockchain scaling, unequivocally establishing MEV as a critical economic constraint demanding immediate architectural re-design for true progress.
Signal Acquired from ∞ flashbots.net