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MEV Capture Through Time-Advantaged Arbitrage

In: Mathematical Research for Blockchain Economy

Author

Listed:
  • Robin Fritsch

    (ETH Zurich
    Matter Labs)

  • Maria Inês Silva

    (Matter Labs
    NOVA Information Management School)

  • Akaki Mamageishvili

    (Offchain Labs)

  • Benjamin Livshits

    (Imperial College London)

  • Edward W. Felten

    (Offchain Labs)

Abstract

As blockchains begin to process significant economic activity, the ability to include and order transactions inevitably becomes highly valuable, a concept known as Maximal Extractable Value (MEV). This makes effective mechanisms for transaction inclusion and ordering, and thereby the extraction of MEV, a key aspect of blockchain design. Beyond traditional approaches such as ordering in a first-come-first-serve manner or using priority fees, a recent proposal suggests auctioning off a time advantage for transaction inclusion. In this paper, we investigate this time advantage mechanism, focusing specifically on arbitrage opportunities on Automated Market Makers (AMMs), one of the largest sources of MEV today. We analyze the optimal strategy for a time-advantaged arbitrageur and compare the profits generated by various MEV extraction methods. Finally, we explore how AMMs can be adapted in the time advantage setting to capture a portion of the MEV.

Suggested Citation

  • Robin Fritsch & Maria Inês Silva & Akaki Mamageishvili & Benjamin Livshits & Edward W. Felten, 2026. "MEV Capture Through Time-Advantaged Arbitrage," Lecture Notes in Operations Research, in: Stefanos Leonardos & Amir K. Goharshady & William Knottenbelt & Panos Pardalos (ed.), Mathematical Research for Blockchain Economy, pages 1-22, Springer.
    • Handle: RePEc:spr:lnopch:978-3-032-13377-9_1
    DOI: 10.1007/978-3-032-13377-9_1
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