Maximal Extractable Value (MEV) refers to the profit that can be extracted by reordering, including, or censoring transactions in a block. Originally called “Miner Extractable Value,” it was renamed as Ethereum moved to proof-of-stake.

The Social Welfare Question

MEV extraction has complex welfare implications. On one hand, it can be seen as rent extraction from users. On the other hand, MEV searchers provide useful services like arbitrage (keeping prices consistent across venues) and liquidations (maintaining protocol solvency).

Early work on permissionless extractable value and social welfare explores these tradeoffs. The key questions:

• When does MEV extraction benefit the ecosystem?
• When is it purely extractive?
• How can protocol design minimize harmful MEV while preserving beneficial arbitrage?

MEV-Boost and Proposer-Builder Separation

MEV-Boost implements proposer-builder separation (PBS) for Ethereum. Instead of validators building their own blocks, specialized builders compete to construct the most valuable block, and validators simply select the highest-bidding builder.

This architecture:

• Separates the role of block building from block proposing
• Creates a competitive market for block construction
• Reduces centralization pressure on validators (they don’t need sophisticated MEV infrastructure)

The non-exploitative relay work explores modifications to the relay design that could improve welfare outcomes.

Research Directions

Several open questions remain:

Mechanism design: Can we design transaction inclusion mechanisms that reduce harmful MEV while preserving market efficiency?

Welfare measurement: How do we even measure the welfare impact of MEV? Whose welfare counts?

Permissionlessness and MEV: This paper explores limits of permissionless mechanisms when creating new identities is cheap—directly relevant to MEV extraction strategies.

Cross-domain MEV: As more value flows across chains and layers, MEV opportunities become increasingly cross-domain. How does this change the analysis?

Connection to Broader Themes

MEV connects to several themes in my research:

• Mechanism design: MEV is fundamentally about incentive alignment in transaction ordering
• Market microstructure: Block building is a form of market making with peculiar constraints
• Public goods: Healthy MEV markets may be a public good, or MEV might be extracting from public goods

The Ethereum ecosystem’s approach to MEV—acknowledging it exists and designing systems to channel it productively rather than pretending it doesn’t happen—offers lessons for mechanism design more broadly.