Author: ZmnSCPxj 2022-05-20 01:03:11
Published on: 2022-05-20T01:03:11+00:00
MEV, or Miner-Extractable Value, is a concept where miners analyze which of the possible contract executions are most profitable for them, and order transactions on the block they are building in such a way that it is the most profitable path that gets executed. This can make complicated MEV extraction profitable, making "smart" miners more profitable than "dumb" ones, leading to centralization. To reduce MEV, contracts should be as little-revealed as possible, with the use of privacy mechanisms like Taproot, which reveals only one branch at a time. Cross-transaction introspection should require an adaptor signature that is kept secret by the participants from the miner that might want to manipulate the transactions to make other alternate branches more favorable to the miner. Covenant mechanisms that require large witness data are more vulnerable to MEV. The disputant that is inherently "wrong" should be burdened with the larger witness to prevent fee-maximizing miners from preferring the smaller-witness branch of the contract.
Updated on: 2023-06-15T21:16:24.146433+00:00