Briefing
The fundamental problem of Maximal Extractable Value (MEV) being an external revenue stream that introduces centralization risk is addressed by the Execution Tickets mechanism. This foundational breakthrough proposes a protocol-native ticketing system that directly internalizes and brokers the value associated with proposing execution payloads. The mechanism creates a new tradable asset, the Execution Ticket, which represents the present value of future block production rights. The most important implication is the creation of a structurally more secure and economically robust blockchain architecture by shifting MEV capture from an off-chain externality to an on-chain, equitably distributed protocol asset.
Context
Prior to this research, MEV was largely an external phenomenon, a consequence of transaction ordering manipulation by block producers to extract profit through activities like arbitrage and liquidations. This established model created significant centralization pressure, as it incentivized vertical integration between block builders and proposers. The prevailing theoretical limitation was the inability of the protocol to capture and distribute this economic value directly, which threatened the fairness and liveness of the underlying decentralized network by introducing unpredictable financial losses for users.
Analysis
The core mechanism transforms the right to propose an execution payload ∞ the primary source of MEV ∞ into a new, protocol-native asset known as the Execution Ticket. This ticket is a tradable, financialized instrument that represents the present value of future block production rights. By creating a transparent, on-chain market for these tickets, the protocol effectively brokers the MEV value.
Validators receive this native asset as part of their compensation, thereby internalizing the external MEV revenue stream into the protocol’s own economic structure. This mechanism addresses the MEV problem through direct, protocol-level capture and redistribution , thereby fundamentally differing from previous approaches focused solely on mitigation or obfuscation.
Parameters
- Asset Value Correlation ∞ Expected to correlate closely with the present value of all value associated with future block production. (This defines the critical economic parameter introduced by the new native asset.)
Outlook
This research opens new avenues in mechanism design, prioritizing MEV internalization as a core strategy over previous MEV mitigation efforts. In the next 3-5 years, this theory could be implemented to create a new layer of decentralized financial primitives, where the value of future network activity is tokenized and managed on-chain. Future research will focus on the precise calibration of the ticketing mechanism to ensure optimal incentive compatibility and market stability for this new class of protocol asset.
Verdict
This mechanism design constitutes a foundational re-architecture of blockchain economics, converting a systemic security externality into a protocol-native, equitably distributed asset.
