MEV Makes Everyone Happy under Greedy Sequencing Rule
Yuhao Li, Mengqian Zhang, Jichen Li, Elynn Chen, Xi Chen, Xiaotie Deng

TL;DR
This paper analyzes how miners can maximize MEV under a greedy sequencing rule that prevents sandwich attacks, revealing computational complexities and showing that optimal strategies can benefit all users in fee-free scenarios.
Contribution
It systematically studies miners' optimal MEV strategies under a new sequencing rule, proving polynomial-time solutions without fees and NP-hardness with fees, and demonstrates user benefits from optimal strategies.
Findings
Optimal strategies are polynomial-time computable without trading fees.
With trading fees, finding optimal strategies is NP-hard.
User profits are maintained or improved when miners adopt optimal strategies.
Abstract
Trading through decentralized exchanges (DEXs) has become crucial in today's blockchain ecosystem, enabling users to swap tokens efficiently and automatically. However, the capacity of miners to strategically order transactions has led to exploitative practices (e.g., front-running attacks, sandwich attacks) and gain substantial Maximal Extractable Value (MEV) for their own advantage. To mitigate such manipulation, Ferreira and Parkes recently proposed a greedy sequencing rule such that the execution price of transactions in a block moves back and forth around the starting price. Utilizing this sequencing rule makes it impossible for miners to conduct sandwich attacks, consequently mitigating the MEV problem. However, no sequencing rule can prevent miners from obtaining risk-free profits. This paper systemically studies the computation of a miner's optimal strategy for maximizing MEV…
Peer Reviews
No public reviews on file for this paper yet. If you reviewed it on a platform where reviews are public (OpenReview, ICLR, NeurIPS, ICML), you can paste yours below so the community can read it here.
Videos
No videos yet. Explain this paper in a talk, walkthrough, or lecture? Add one.
Taxonomy
TopicsBlockchain Technology Applications and Security · Banking stability, regulation, efficiency · Auction Theory and Applications
