Cost of Feudalism: Towards a Theory of MEV
Duration: 00:30:05
Speaker: Tarun Chitra, Guillermo Angeris
Type: Talk
Expertise: Advanced
Event: Devcon
Date: Oct 2022
Maximal Extractable Value (MEV) is excess value captured by miners/validator. This excess value often comes from reordering, censoring, or inserting new transactions that allow a miner to front-run users' transactions. Is MEV *always* bad? Can it sometimes lead to good equilibria for users? We modify tools from algorithmic game theory and probability to prove some surprising paradoxes — *some* MEV improves trading efficiency in networks of automated market makers.