peer-to-peer networks

METHODOLOGY FOR COMPARATIVE ANALYSIS OF MAXIMAL EXTRACTABLE VALUE (MEV) IN DECENTRALIZED EXCHANGE PROTOCOLS

The development of smart contracts in blockchain networks has enabled the creation of sophisticated decentralized finance (DeFi) protocols, encompassing decentralized exchanges, lending platforms, and algorithmic crypto-assets. Despite decentralization and transparency, blockchain networks do not guarantee a predictable transaction execution order, leading to the emergence of the phenomenon known as Maximal Extractable Value (MEV) – an additional profit extracted by certain network participants who influence transaction ordering.

Maximal extractable value (MEV) in blockchain networks and its impact on blockchain ecosystem

The advent of smart contract technology in blockchain networks has ushered in a new era of possibilities for implementing complex decentralized finance protocols. Over time, these protocols have gained significant traction, reaching a Total Value Locked (TVL) of over 150 billion US dollars. While blockchain networks offer inherent benefits such as immutability, transparency, decentralization, and security, they still grapple with a critical challenge – the inability to ensure a predictable order of transactions within produced blocks.