Foresight Ventures: MEV, Definition & Difference & Decrease

0. MEV?

a) MEV, Always Here

The ordering of transactions in an Ethereum block is not bound by definite rules from the beginning, but can be freely modified according to miners’ preferences. Three examples are provided in the source code of the Geth client:

  • Second: Sort by gas fee and Nonce (default option)
  • Third: Sort by owner, then sort by gas fee and Nonce

b) MEV, Everywhere

Before formally interpreting the definition of MEV, we can look at some data on MEV so that we can visualize its presence and impact.

c) MEV Supply Chain

So how does an MEV activity come about?

  • Growth: MEV searchers (who may be miners) pick out all profitable opportunities and try to capture MEV by sending transactions or deliberately sequencing transactions.
  • Mature: Miners in L1 (who in most cases will not be MEV searchers) or Sequencer in L2 aggregating transactions and producing blocks.
  • Death: The verifier (currently still a miner) verifies the block, and the transaction is officially confirmed.

d) Definition of MEV

The term MEV has two official interpretations:

  • Maximum Extractable Value.
  • A ordinary user: woke up in the morning to buy ETH, but the first tx failed due to insufficient gas; the second tx was successful at noon but was rugged by the sandwich; stayed up late at night to mint a long-favored free mint NFT, but the trade was monitored by others just before it was sent out, and eventually it was not minted.

1. Difference in MEV

Here is a clear illustration of the MEV activity by 0xminion:

a) Front Running

Front Running is an MEV bot that pays a slightly higher gas fee to execute a transaction before a Mempool transaction, such as swap tokens at a lower price.

b) Back Running

Back Running is when a robot attempts a different arbitrage, liquidation, or trade after a tx has caused a significant price misalignment.

c) Sandwich Attack

Sandwich Attack is a combination of the first two attacks, attacking a transaction in a back-and-forth manner. For example, the MEV bot places a buy order before the tx and a sell order after the tx, causing the user’s tx to execute at a worse price.

d) Time-Bandit Attack

A time thief attack is when, after a block has been generated, a miner re-mines the block causing the blockchain to reorg, while extracting value from the block he mined. This is the most pernicious form of MEV, invalidating user transactions. At the same time, it is rare, but it can happen.

e) Clogging

The validity of any NFT, Asset, and Rollup transaction is actually guaranteed by purchasing a space in a block on the blockchain network. The following is the supply and demand in the blockchain block space market:

f) Non-Broadcast Transactions

The previous types of activity are basically initiated by MEV bots, not by block miners themselves.

2. MEV, Good or Bad?

In the previous analysis we looked at the different types of MEVs, interspersed with our evaluation of each and our judgement of whether they are good or bad. So overall, are MEVs good or bad? What should we do about it? How do different networks respond to it in different ways?

  • Bad MEV: Used to extract value from other users (Sandwich Attack), sent privately and not broadcast (Time-Bandit Attack, Non-Broadcast Transactions), affects the normal operation of the network (Clogging).

3. MEV Decrease Strategy

Before discussing strategies for MEV, we need to be clear that information asymmetries and externalities cannot be completely eliminated in any context, but we can only deal with them in a better way.

a) Fix the MEV black market and its huge incentive

MEV is a black market (or dark forest) created by opaque information and knowledge, a black market that generates huge profits. It is through this lens that we will consider strategies to target the MEV.

b) Complexity of MEV: Scenario Difference

  • Single-chain scenario: Most of this paper is devoted to MEV in a single blockchain network, which in reality is an overly idealized analysis.
  • Cross-chain scenario: One blockchain network = one trust zone. In reality, there are countless blockchain networks with different mechanisms and different types of MEV, and these countless trust zones allow arbitrage between networks to exist everywhere. For example, even if Ethereum has no MEV at all, if there is an arbitrage opportunity on Cosmos, then a bridge verifier or cross-chain application bot can capture MEV on Cosmos, and eventually Ethereum becomes a victim of this MEV.

b) Complexity of MEV: Network Architecture Difference

In our article exploring Rollup networks, we learned about the difference between a monolithic Layer1 and a Layer2 Rollup built on top of it.

3. Conclusion

This article is only a superficial analysis of the topic of MEV, there are many interesting things not mentioned due to space (SGX, PBS, etc.), we recommend you to read more than 50 related links at the end of the article.

  • no spam
  • Very low fees(low fees)
  • no censorship + low fees: MEV Searcher will send spam and make normal transactions affected.
  • no censorship + no spam: You need a rate market to sort transactions, and you need higher gas to prioritize transactions.
  • Miners: feel free to capture value, as this is a part of network game theory.
  • DApp Developers: Design applications with MEV concept in mind, and whether the mechanism will hurt the average user.
  • Users: Understand MEV, and try not to use networks or applications with inadequately designed MEV mechanisms.
  • Others: Encourage MEV research, participate in MEV discussions, Front run the crisis.

About Foresight Ventures

Foresight Ventures is dedicated to backing the disruptive innovation of blockchain for the next few decades. We manage multiple funds: a VC fund, an actively-managed secondary fund, a multi-strategy FOF, and a private market secondary fund, with AUM exceeding $400 million. Foresight Ventures adheres to the belief of “Unique, Independent, Aggressive, Long-Term mindset” and provides extensive support for portfolio companies within a growing ecosystem. Our team is composed of veterans from top financial and technology companies like Sequoia Capital, CICC, Google, Bitmain and many others.




Foresight Ventures is a blockchain technology-focused investment firm, focusing on identifying disruptive innovation opportunities that will change the industry

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Foresight Ventures

Foresight Ventures


Foresight Ventures is a blockchain technology-focused investment firm, focusing on identifying disruptive innovation opportunities that will change the industry