Unchained The Chopping Block: Why the Once-Taboo MEV Is Now a Core Part of Ethereum - Ep. 449
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Jan 28, 2023 Phil Daian, co-founder of Flashbots and a leading voice in MEV research, dives into the intricate world of maximal extractable value in this captivating discussion. He draws parallels between MEV and 'Alice in Wonderland,' detailing its emergence and the birth of Flashbots. The conversation explores ethical implications, including the push for fair transaction ordering and debates on whether MEV should be accepted. Phil also shares insights on compliance with sanctions and the future of decentralized systems, making for a thought-provoking listen.
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Phil Daian's MEV Rabbit Hole
- Phil Daian's journey into MEV began with Bitcoin for digital activism, leading him to formalize smart contract security.
- Early MEV bot experiments and gas token creation fueled his research, despite initial doubts about MEV's real-world impact.
Challenging Blockchain Assumptions
- Early assumptions about blockchain transaction ordering, like those in Bitcoin, were challenged by events like the Status ICO front-running incident involving F2 pool.
- This highlighted the potential for miners to exploit block ordering for profit, raising questions about blockchain fairness and security.
Defining and Formalizing MEV
- MEV represents the maximum value extractable by privileged actors like validators or miners, maximizing their profit through actions like reordering or censoring transactions.
- Formalizing MEV with mathematical definitions like in the Clockwork Finance paper allows for better analysis and solutions.
