Briefing
This research asserts that Maximal Extractable Value (MEV) spam has become the primary impediment to blockchain scaling, consuming vast network resources and inflating transaction fees for users. It highlights how current technical scaling solutions are undermined by economically rational, yet systemically inefficient, on-chain search strategies. The paper proposes a novel approach combining programmable privacy and explicit bidding to transition from wasteful “spam auctions” to an efficient, fair market for MEV, thereby unlocking the true potential of scalable blockchain architectures.
Context
Before this research, the prevailing focus in blockchain scaling centered on increasing raw technical throughput through methods like sharding and rollup optimizations. However, this perspective overlooked a critical economic limitation ∞ the inherent market structure of MEV. The challenge was that block producers, driven by profit, engaged in wasteful on-chain searching to capture arbitrage opportunities, leading to network congestion and an artificially elevated baseline for transaction fees, thereby neutralizing scaling benefits.
Analysis
The core idea presented is that MEV-driven spam, characterized by numerous failed arbitrage attempts consuming disproportionate gas, systematically limits blockchain scalability. The proposed solution involves two complementary mechanisms ∞ programmable privacy and explicit bidding. Programmable privacy grants searchers real-time transaction flow visibility while verifiably restricting their actions to backrunning, preventing frontrunning or sandwich attacks. Explicit bidding replaces gas-based competition with direct monetary bids for specific transaction inclusion and ordering rights, fostering an efficient, price-based market for MEV.
- Core Concept ∞ MEV as Scaling Limit
- Proposed Solution ∞ Programmable Privacy and Explicit Bidding
- Key Mechanism ∞ New MEV Auction Design
- Empirical Evidence ∞ Data from OP-Stack Rollups (Base, OP Mainnet)
- Identified Problematic Behavior ∞ On-chain Spamming for Arbitrage
- Primary Authors ∞ Robert Miller (Flashbots)
Outlook
This research opens new avenues for designing more efficient and equitable blockchain economies, moving beyond purely technical throughput enhancements. The integration of programmable privacy and explicit MEV auctions could unlock new applications requiring abundant, low-cost blockspace, such as on-chain social networks or agentic micropayments. Future work will likely focus on refining programmable privacy mechanisms and optimizing auction designs, potentially leading to a fundamental re-architecture of transaction ordering in decentralized systems.
Signal Acquired from ∞ Flashbots Writings
