Maximal Extractable Value (MEV) Research and development for transparent, democratised and distributed MEV
About MEV
Maximal Extractable Value (MEV) refers to the value extracted by miners or validators that have the power to include, remove and reorder transactions on Ethereum. It is considered one of the most difficult challenges to solve today on any smart contract blockchain. At Nethermind, we have a long-standing collaboration with Flashbots, supporting them in their mission to mitigate the negative externalities of current MEV extraction techniques. Below are a few Flashbots projects we have contributed to.
Nethermind MEV Plugin
The MEV Plugin is an implementation of the Flashbots auction mechanism. Any validator using the Nethermind client, or supported side chains, can leverage the auction mechanism through this plugin and increase their earnings by getting the opportunity to mine searcher bundles, all without congesting the network. Ultimately, the plugin benefits the user, who can send private, non-revertable transactions, i.e. the user does not have to pay for a transaction that fails. The MEV plugin can be turned on or off and it is compatible with certain built-in configs. Read more in our documentation, or enjoy any of these links for further reading:
How to run the Flashbots auction mechanism on Nethermind
Flashbots Docs
MEV Inspect - to illuminate the dark forest
Flashbots’ MEV-Inspect is a blockchain inspector that scans Ethereum and identifies MEV extraction activity. The inspector walks the blockchain, transaction-by-transaction, identifying known actions that occur within a transaction and inferring from their combined behaviour what is likely occurring inside them. Once classified, the metrics are faceted on important tags (provider, transaction type, success) and dropped into a database for charting and further analysis.
The Flashbots Data team, which includes engineers from Nethermind, recently released mev-inspect-py, now written in Python and used to power mev-explore, a frontend tool to easily visualize data provided by mev-inspect-py.
MEV-SGX
In an effort to achieve completely private and permissionless MEV auctions, Flashbots is developing MEV-SGX which leverages Intel’s SGX Secure Enclave. Searchers first craft blocks with MEV to extract. Using Searcher-SGX, they validate the block and send the miner the hash of the truncated header of the block, and the reward that the miner would get for including it on-chain. The miner, using Miner-SGX, makes sure the block is valid without knowing the transactions inside it, and then performs the Proof of Work algorithm with the hash of the truncated header. Once the proof is generated, the miner contacts the searcher to obtain the transactions and include them in the blockchain.
We have worked closely with Flashbots engineers, researching the topic since the idea was first proposed. More recently, we worked with them to develop a proof of concept.
