The ongoing issue of Maximal Extractable Value (MEV) in the blockchain industry is becoming increasingly relevant, limiting the scalability of networks. In a recent report, the Flashbots team presented new information about the impact of MEV and potential solutions.
Warning About MEV
In Robert Miller's report, the Product Lead at Flashbots, it is highlighted that on-chain bot activities consume vast resources and threaten the efficiency of high-performance networks like Solana and Ethereum Layer-2. Miller noted, 'At a time when leading networks like Ethereum and its L2s, as well as Solana, are racing to scale as quickly as possible, the economic limits imposed by MEV are becoming apparent across the industry.'
Disproportionate Transaction Costs
Miller pointed out a stark imbalance between normal and MEV transactions, indicating that MEV bots account for over 50% of gas fees on major OP-Stack rollups, such as Optimism and Base, while contributing less than 10% to transaction handling fees. This inefficiency is also observed on Solana, where bots occupy 40% of blockspace but pay only 7% of fees. For instance, on Base, an increase of 11 million gas per second in throughput between November 2024 and February 2025 was entirely consumed by spam bots.
Proposed Solutions by Flashbots
To address this market failure, Flashbots proposed a dual-pronged solution. First, they advocate for programmable privacy using Trusted Execution Environments (TEEs), allowing searchers to backrun private transactions without the ability to sandwich. Miller emphasizes, 'TEEs provide guarantees that specific code is being executed with data kept confidential even from the machine’s operator.' Secondly, they call for explicit bidding mechanisms to create efficient, price-based auctions for transaction ordering. These solutions could significantly enhance blockchain revenues and improve the experience for both users and developers.
Thus, the issues related to MEV are becoming a significant factor in the blockchain industry, and the proposals from Flashbots could greatly enhance efficiency and reduce transaction costs.
