MEV: Exploring New Opportunities in Blockchain Transaction Ordering

MEV (Maximal Extractable Value) has become a hot topic in the blockchain industry as it involves transaction ordering and arbitrage opportunities. To ensure transparency, protect transactions, maintain network health, and reward participants, some blockchain projects are implementing improvement proposals and other mechanisms to guide the development of MEV.

Core Mechanisms of the MEV Ecosystem

The MEV ecosystem is typically formed through the following key mechanisms:

1. MEV Transaction Submission Mechanism
2. MEV Opportunity Release Mechanism
3. MEV Revenue Distribution Mechanism
4. User Transaction Protection Mechanism

When designing these mechanisms, several important principles need to be considered:

• User transaction protection takes precedence over value extraction
• The transparency of the network is better than private transactions with nodes.
• Promote competition through prioritized gas auctions to curb spam transactions.
• Encourage the distribution of rewards to all participants in the ecosystem.

Transaction Submission Optimization

Priority gas auction ( PGA ) is an effective resource allocation method that can prevent spam transactions while redistributing gas fees among participants. The key to PGA lies in quantifying execution:

• Transactions are processed in blocks sorted by consensus.
• Traders compete for priority through gas auctions.
• A higher consensus submission rate can improve DEX execution efficiency.
• For non-congested objects, the fastest searcher has an advantage.
• Congestion objects may delay transaction execution, amplifying the importance of PGA.

In order to optimize transaction submissions, some blockchain projects are implementing new mechanisms:

1. Submit batch transactions through soft bundling
2. Amplifying Priority Transactions through Consensus

These mechanisms aim to create a more efficient and fair competitive system while suppressing junk trading behavior.

Choose the appropriate trading gas price

When determining the gas price for submitting a transaction, the client should consider the following factors:

1. Priority gas auction: Transactions for the same target are sorted by gas price.
2. Consensus submission amplification: Gas prices above the threshold can reduce the jitter of inefficient submissions.
3. Avoid congestion delays and cancellations: Limit execution time by controlling the transaction rate that modifies shared objects.

By analyzing the gas prices of executed and canceled transactions, the client can determine the required gas price to avoid transaction delays with high probability.

Transaction Information Dissemination

Every transaction on the Blockchain may introduce new profit opportunities. From the client submission to the observation of its effects by a third party, the lifecycle of a shared object transaction includes multiple steps:

1. The client submits the transaction
2. Node broadcasts transaction
3. Node Broadcast Transaction Certificate
4. Verify node submits transaction
5. Transaction Execution
6. Transaction Effect Certificate Return
7. Generate Checkpoint
8. Checkpoint Signature Broadcast
9. Status Synchronization Protocol Propagation Checkpoint
10. Third-party node download checkpoint

Protecting User Transactions

To protect users' transactions from the impact of front-running, sandwich attacks, and involuntary submission delays, some Blockchain projects have taken the following measures:

1. External member-driven: Transaction submission requires external member drive, usually executed by full nodes.
2. Fast Path Protocol: Some projects are developing new transaction submission mechanisms to improve system efficiency.

Although these innovations may bring new risks, they also provide a better basis for accountability.

Conclusion

With the introduction of new mechanisms, the MEV ecosystem on the Blockchain will continue to evolve. Innovations such as time-lock encryption and fast path protocols will reshape transaction execution and security. These developments will create a more dynamic and transparent ecosystem, bringing new opportunities and challenges for the future of Blockchain technology.