Bankless 170 - Burning MEV with Justin Drake and Dom
12 snips
May 8, 2023 
Justin Drake, a key researcher at the Ethereum Foundation and creator of Ultrasound.Money, joins Dom to delve into Ethereum's latest upgrade focused on burning Miner Extractable Value (MEV). They explain MEV's impact on the network and the dual nature of its benefits and challenges. The conversation includes the economic implications of this change, concerns about staking rewards, and the potential for a deflationary environment. With intriguing analogies and expert insights, the duo reveals how this upgrade may reshape the Ethereum landscape.
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MEV Defined
- MEV (Maximal Extractable Value) is value extracted by participants in an economic system, like Ethereum.
- Participants can manipulate transaction ordering for profit, creating an incentive problem.
ETH as Oil
- ETH is like oil with three forms: crude (held), petroleum (gas fees), and jet fuel (MEV).
- MEV Burn harnesses this "jet fuel" to enhance Ethereum's security and bandwidth.
Birds and Bread
- Imagine birds fighting over bread; this represents MEV bots competing for transaction ordering.
- MEV burn smooths out these spikes, improving chain stability like removing the bread.