Why MEV Will Always Be Controversial - Ep. 482

Unchained

Laura Shin

Tech News, Business News, News

4.6 • 1.3K Ratings

🗓️ 18 April 2023

⏱️ 69 minutes

🔗️ Recording | iTunes | RSS

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Summary

Maximal extractable value, or MEV, is a mainstay of the Ethereum landscape. But the process of validators reaping profits from handling new blocks is not without controversy. Ethereum Foundation researcher Justin Drake and bloXroute Labs CEO Uri Klarman assess the current state of MEV. Hear them disagree about the path forward for making Ethereum fairer for all its economic actors. Show highlights: what MEV is and how it has evolved over time the nuances of the newly proposed MEV Blocker and why it’s important for users whether it’s possible to enable “back-running” while preventing front-running how to give power back to blockchain users what the differences and similarities are among several projects trying to solve MEV how “MEV Burn” will be like the EIP-1559 to what Justin calls contention whether EigenLayer can help solve MEV problems whether wallets and DEXs could be doing something different to prevent MEV and generate more revenue how “exclusive order flow” could be detrimental to DeFi users what proposer-builder separation (PBS) is and whether it will change MEV distribution why Uri doesn’t think PBS is the right step forward for Ethereum Thank you to our sponsors! Crypto.com Halborn Guests: Justin Drake, researcher at the Ethereum Foundation Uri Klarman, CEO of bloXroute Labs Links Previous coverage of Unchained on MEV: Why Is Ethereum Trying to Maximize Value From Users? Two Sides Debate The Chopping Block: Why the Once-Taboo MEV Is Now a Core Part of Ethereum MEV Blocker CoinDesk: MEV Blocker Wants to Help You Outrun the Front-Runners MEV Blocker Unchained: Ethereum Builders Join Forces to Launch MEV Blocker MEV Distribution CoinDesk: Flashbots Proposes New Class of 'Matchmakers' to Share MEV Gains With Ethereum Users MEV-Share: programmably private orderflow to share MEV with users - The Flashbots Ship BackRunMe Wallet-Boost Design Doc · blocknative discourse · Discussion #1 · GitHub OpenMEV Mechanics and Formulas - Manifold Finance MEV Smoothing Committee-driven MEV smoothing - Economics MEV Burn Burning MEV through block proposer auctions - Economics Proposer-Builder separation Proposer-builder separation | ethereum.org Vitalik Buterin’s tweet Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Hi, everyone. Welcome to Unchained. You're no high-free source for all things crypto. I'm your host,
0:08.7	Laura Shin, author of The Crypto Peans. I started covering crypto seven years ago, and as a senior
0:13.6	editor at Forbes was the first mainstream motor porter to cover cryptocurrency full-time.
0:17.7	This is the April 18th, 2023 episode of Unchained. Unchained comes out twice a week, but crypto
0:23.3	news breaks constantly. For up to the minute news toys, please check out our new website,
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0:46.0	Web 3 projects lost nearly $4 billion of crypto assets in 2022, but nothing is more expensive
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0:58.4	Visit Halborn.com for more. If you've been enjoying Unchained and find the discussions here
1:03.2	fascinating, mind-blowing, or as crypto tends to be, downright bonkers, please share this
1:08.7	episode with a friend to keep the conversation going. Today's topic is M-E-V or maximal extractable
1:15.7	value and the distribution of it. Here to discuss our Erie Klarman, CEO of Lockstreet and Justin
1:21.9	Drake, researcher at the Ethereum Foundation. Welcome, Erie and Justin. Hey, good to be here.
1:28.2	Thanks for having us. So before we dive into all the details on M-E-V distribution,
1:34.7	let's first get some background out of the way just so all the listeners understand the full context
1:40.8	of this situation. So Erie, we'll start with you. Can you just explain what M-E-V is?
1:46.8	Sure. M-E-V maximal extractable value is basically all the value validators can extract by
1:53.9	ordering transactions, seeing trades, trading ahead of them, etc. In reality, what it really,
1:59.2	really means is if somebody is trying to buy a muniswap, a large amount of yeast,
2:05.1	let's say that is going to change the price. So there is value in trading just ahead of it,
	...

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