A Flash(bot) in the Pan: Measuring Maximal Extractable Value in Private Pools
arXiv:2206.04185 · doi:10.1145/3517745.3561448
Abstract
The rise of Ethereum has lead to a flourishing decentralized marketplace that has, unfortunately, fallen victim to frontrunning and Maximal Extractable Value (MEV) activities, where savvy participants game transaction orderings within a block for profit. One popular solution to address such behavior is Flashbots, a private pool with infrastructure and design goals aimed at eliminating the negative externalities associated with MEV. While Flashbots has established laudable goals to address MEV behavior, no evidence has been provided to show that these goals are achieved in practice. In this paper, we measure the popularity of Flashbots and evaluate if it is meeting its chartered goals. We find that (1) Flashbots miners account for over 99.9% of the hashing power in the Ethereum network, (2) powerful miners are making more than what they were making prior to using Flashbots, while non-miners' slice of the pie has shrunk commensurately, (3) mining is just as centralized as it was prior to Flashbots with more than 90% of Flashbots blocks coming from just two miners, and (4) while more than 80% of MEV extraction in Ethereum is happening through Flashbots, 13.2% is coming from other private pools.
14 pages, ACM IMC 2022
References in corpus (6)
- Frontrunner Jones and the Raiders of the Dark Forest: An Empirical Study of Frontrunning on the Ethereum Blockchain
- Eliminating Sandwich Attacks with the Help of Game Theory
- A2MM: Mitigating Frontrunning, Transaction Reordering and Consensus Instability in Decentralized Exchanges
- Extracting Godl [sic] from the Salt Mines: Ethereum Miners Extracting Value
- The Evolution of Blockchain: from Lit to Dark
- FairTraDEX: A Decentralised Exchange Preventing Value Extraction
Cited by in corpus (8)
- AI Ethics on Blockchain: Topic Analysis on Twitter Data for Blockchain Security
- Credible Decentralized Exchange Design via Verifiable Sequencing Rules
- Nurgle: Exacerbating Resource Consumption in Blockchain State Storage via MPT Manipulation
- Maximal Extractable Value in Decentralized Finance: Taxonomy, Detection, and Mitigation
- AI-Based Crypto Tokens: The Illusion of Decentralized AI?
- LookAhead: Preventing DeFi Attacks via Unveiling Adversarial Contracts
- A theoretical basis for MEV
- Unpacking Maximum Extractable Value on Polygon: A Study on Atomic Arbitrage