Miner Extractable Value (MEV) sparks new round of debate, Princeton University professor puts forward five arguments

The debate over miner extractable value (MEV) and transaction ordering in the Ethereum community has heated up again due to a recent article by Ari Juels and his co-authors, and the tweetstorm that followed, and the debate often conflates issues that I believe should be kept separate. Therefore, building on my past articles, I will present 5 arguments that I hope will help clarify some concepts.

Argument 1: Front-running hurts users

Amid the heated debate, the overarching point that is all too easily forgotten is that front-running reduces the value of markets and discourages participation. A world without so much front-running would be a better world (meaning less value extracted from users).

Now, you could argue that front-running is unstoppable, or that we are unfortunately locked into more front-running than ever before, and these are plausible arguments. However, front-running is, at best, a necessary evil, and one that the community should seek to reduce.

Argument 2: All else being equal, if front-running is to occur, trading sequencing should take place in a transparent market.

Today’s Ethereum is dominated by front-running: miners can control the ordering of transactions within their own blocks, so miners can make trades (buys or sells) that are beneficial to them before users do.

If order ordering is for selling, it might as well be sold transparently so that regular users (not just miners) can see what’s going on. Systems like Flashbots don’t cause the front-running problem, they exist to mitigate it.

Argument 3: Some designs and protocols are better at resisting front-running, which is a good thing

Not all protocols are created equal, and how much front-running can exist in a protocol will depend on how the protocol is designed. Therefore, when we evaluate a protocol, we should ask whether it increases or decreases the chances of front-running. This is not the only question to consider, but it should be a factor when evaluating new protocols or changes to existing ones.

Argument 4: There is still a lot of research to be done on how to make systems more resistant to front-running, and how to make systems that resist front-running more practical

There are still many unsolved problems about how to provide fair ordering. Current research is promising and it looks like some significant improvements can be found. It will be important to continue to advance this research and move more mature research into practice. Over time, our system will be able to resist front-running better and better.

Argument 5: The worst thing we can do right now is to adopt a structure that increases front-running and lock ourselves into it

First, don’t hurt others. Adopting new protocols that increase front-running, such as using “MEV auctions” will make the front-running problem worse, which is what we should avoid.

At worst, this change will lock us into a world with a more advanced edge. This will cause immediate harm, but its worst effect will be to prevent the adoption of better, more resilient approaches.

For a long time, the community will be dealing with front-running and working to reduce it.