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The Specter (and Spectra) of Miner Extractable Value

Author

Listed:
  • Guillermo Angeris
  • Tarun Chitra
  • Theo Diamandis
  • Kshitij Kulkarni

Abstract

Miner extractable value (MEV) refers to any excess value that a transaction validator can realize by manipulating the ordering of transactions. In this work, we introduce a simple theoretical definition of the 'cost of MEV', prove some basic properties, and show that the definition is useful via a number of examples. In a variety of settings, this definition is related to the 'smoothness' of a function over the symmetric group. From this definition and some basic observations, we recover a number of results from the literature.

Suggested Citation

  • Guillermo Angeris & Tarun Chitra & Theo Diamandis & Kshitij Kulkarni, 2023. "The Specter (and Spectra) of Miner Extractable Value," Papers 2310.07865, arXiv.org, revised Oct 2023.
    • Handle: RePEc:arx:papers:2310.07865
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    File URL: http://arxiv.org/pdf/2310.07865
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    References listed on IDEAS

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    1. Guillermo Angeris & Akshay Agrawal & Alex Evans & Tarun Chitra & Stephen Boyd, 2022. "Constant Function Market Makers: Multi-asset Trades via Convex Optimization," Springer Optimization and Its Applications, in: Duc A. Tran & My T. Thai & Bhaskar Krishnamachari (ed.), Handbook on Blockchain, pages 415-444, Springer.
    2. Max Resnick, 2023. "Contingent Fees in Order Flow Auctions," Papers 2304.04981, arXiv.org.
    3. repec:cup:cbooks:9781316779309 is not listed on IDEAS
    4. Roughgarden,Tim, 2016. "Twenty Lectures on Algorithmic Game Theory," Cambridge Books, Cambridge University Press, number 9781316624791, January.
    5. Roughgarden,Tim, 2016. "Twenty Lectures on Algorithmic Game Theory," Cambridge Books, Cambridge University Press, number 9781107172661, January.
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    Cited by:

    1. John, Kose & Monnot, Barnabé & Mueller, Peter & Saleh, Fahad & Schwarz-Schilling, Caspar, 2025. "Economics of Ethereum," Journal of Corporate Finance, Elsevier, vol. 91(C).
    2. Vincent Gramlich & Dennis Jelito & Johannes Sedlmeir, 2024. "Maximal extractable value: Current understanding, categorization, and open research questions," Electronic Markets, Springer;IIM University of St. Gallen, vol. 34(1), pages 1-21, December.
    3. Austin Adams & Benjamin Y Chan & Sarit Markovich & Xin Wan, 2023. "Don't Let MEV Slip: The Costs of Swapping on the Uniswap Protocol," Papers 2309.13648, arXiv.org, revised Apr 2024.

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