Draft:Maximal Extractable Value

Maximal Extractable Value (MEV), previously known as Miner Extractable Value, is a concept within the field of blockchain and cryptocurrency that refers to the measure of the profit a miner (or validator) can make through their ability to arbitrarily include, exclude, or reorder transactions within the blocks they produce..[1][2][3][4]. The term was first coined by the researchers Phil Daian, Steven Goldfeder, Tyler Kell, Yunqi Li, Xueyuan Zhao, Iddo Bentov, and Ari Juels in their paper titled "Flash Boys 2.0"[5].

Researchers have pointed out that the market forces of MEV may present a risk to Proof of stake consensus mechanisms[5][6], while some have pointed out that this extraction of value may resemble market manipulation[7]

References

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  1. ^ Kauflin, Jeff (11 Oct 2022). "The Secretive World Of MEV, Where Bots Front-Run Crypto Investors For Big Profits". Forbes. Retrieved 14 May 2024.
  2. ^ Carapella, Francesca; Dumas, Edward; Gerszten, Jacob; Swem, Nathan; Wall, Larry (2022). "Decentralized Finance (DeFi): Transformative Potential & Associated Risks" (PDF). Finance and Economics Discussion Series. 2022 (2022–057). Board of Governors of the Federal Reserve System: 1–33. doi:10.17016/FEDS.2022.057. Retrieved 2024-05-13.
  3. ^ Mustafa Bedawala; Aaron Salot. "Ethereum's economics and staking model". Visa. Retrieved 14 May 2024.
  4. ^ United States v. Anton Peraire-Bueno and James Peraire-Bueno, 24 Cr. 293 (S.D.N.Y. May 15, 2024).
  5. ^ a b Daian, Phil; Goldfeder, Steven; Kell, Tyler; Li, Yunqi; Zhao, Xueyuan; Bentov, Iddo; Juels, Ari (2020). "Flash Boys 2.0: Frontrunning in Decentralized Exchanges, Miner Extractable Value, and Consensus Instability". 2020 IEEE Symposium on Security and Privacy (SP). doi:10.1109/SP40000.2020.00040. Retrieved 2024-05-13.
  6. ^ Damalas, Greg. "An introduction to maximal extractable value on Ethereum". ey.com. EY. Retrieved 14 May 2024.
  7. ^ U.S. Department of Treasury (2022). Crypto-Assets: Implications for Consumers, Investors, and Businesses (PDF) (Report). Washington, D.C.: Treasury. p. 36. Retrieved 2024-05-13.