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Research from the Flashbots team.

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路 13 min read

Thanks to Phil Daian, Alex Obadia, and Mahimna Kelkar for plenty of discussions on the topic.

Since its introduction in the Flashboys 2.0 paper of 2019 by Daian et al., a lot has been said about Miner (now Maximal) Extractable Value, or MEV. In particular, the launch of the Flashbots Auction propelled what is today a billion dollar economy across various blockchains and centralized exchanges. From thrilling Twitter threads to academic research papers, the MEV phenomenon has captured a central spot in the cryptocurrency discourse. Oddly, however, there is no agreed upon formal definition of MEV.

路 2 min read

The multi-chain future is upon us. Modular architectures are coming to maturity across the ecosystem to scale bandwidth and throughput of cryptocurrency. One example of such is the Ethereum modular architecture, with its beacon chain, its execution chain, its Layer 2s, and soon its shards. These can all be thought as separate blockchains, heavily inter-connected with one another, and together forming an ecosystem.

路 One min read

This document outlines the design for a marketplace for block construction (often referred to as block proposer / block builder separation or PBS) compatible with the upcoming Ethereum merge fork. This trust based solution closely resembles the current Flashbots auction design with modifications to enable solo staker participation without introducing changes to Ethereum consensus. This solution aims to bridge the gap to a permissionless PBS design which should be strongly considered for the cleanup fork in order to improve decentralization.

路 16 min read

The incorporation of EIP-1559 in the London hardfork brings a major restructuring of the Ethereum fee mechanism, aiming to allow for easier fee estimation by users and consolidate ETH as the base currency of the network by burning part of the transaction fees. This post analyzes some of the consequences of this EIP under the light of the MEV (Maximal Extractable Value) phenomenon, that is, the permissionless extraction of value by the reordering, addition, or censoring of transactions.

路 19 min read

Ethereum will soon transition from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus protocol. This transition has been worked on for years and is happening in multiple steps. The first step in December 2020 consisted in launching the beacon chain. It is now live, and, at the time of writing, has more than 160k validators or an equivalent of ~5m ETH staked on it.

路 One min read

While Flashbots Alpha has been and continues to be successful it offers incomplete trust guarantees. It is not permissionless because miners who adopt it have to be whitelisted by MEV-Relay in order to be forwarded bundles. It is not completely private because bundles can be seen by miners prior to inclusion on-chain. Lastly, Flashbots Alpha offers no finality protection against chain reorgs. While finality is important, we are focusing first on permissionless and complete privacy as the next design goals to achieve.

路 11 min read

Maximal (formerly Miner) Extractable Value (MEV\textrm{MEV}) is the value that can be extracted from a blockchain by any agent without special permissions. Considering this permissionless nature, any agent with transaction ordering rights will be in a privileged position to perform the extraction. In Proof of Work blockchains, it is miners who determine transaction ordering within a block, hence the former "miner" term. In practice, bot operators seek to extract MEV\textrm{MEV} by either paying high fees to increase the likelihood that their transactions are mined, or by fine-tuning their gas price choices in order to "time" their transactions right, as is the case when backrunning an oracle update to perform a liquidation.

路 One min read

Flashbots is a research and development organization formed to mitigate the negative externalities and existential risks posed by miner-extractable value (MEV) to smart-contract blockchains. We propose a permissionless, transparent, and fair ecosystem for MEV extraction to preserve the ideals of Ethereum. In this article, we discuss the details of the Flashbots organization and the initial projects on our research roadmap, MEV-Inspect and MEV-Geth.