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The advent of smart contract technology in blockchain networks has ushered in a new era of possibilities for implementing complex decentralized finance protocols. Over time, these protocols have gained significant traction, reaching a Total Value Locked (TVL) of over 150 billion US dollars. While blockchain networks offer inherent benefits such as immutability, transparency, decentralization, and security, they still grapple with a critical challenge – the inability to ensure a predictable order of transactions within produced blocks. This limitation has given rise to the Maximal Extractable Value (MEV) phenomenon. MEV represents the maximum potential benefit that certain network participants, primarily miners and validators, can extract by wielding their exclusive capability to influence transaction order. In this work, we embark on an exhaustive exploration of the MEV phenomenon and delve deep into its impact on the broader blockchain ecosystem. We shed light on the pressing issue of transaction ordering in blockchain networks and provide an in-depth survey of the vast body of scholarly publications focused on MEV extraction. This comprehensive review allowed us to conduct a retrospective analysis of the MEV phenomenon, categorize its most common manifestations, and uncover current development trends. Intriguingly, during this analysis, parallels were drawn with similar manipulations witnessed in the realm of high-frequency algorithmic trading within traditional financial markets. A vital conclusion that emerged from our study pertains to possible strategies for addressing the MEV problem within decentralized finance protocols. We systematically outline the current research directions concerning MEV, explore the methodologies and tools employed in these studies, and present concrete examples of MEV extraction within the Ethereum network, accompanied by quantitative estimations. In summary, the MEV phenomenon has cast an overwhelming negative impact on blockchain networks and decentralized finance. Our analysis of existing publications within a specific subcategory reveals the current absence of an effective solution to the MEV extraction problem. This underscores the importance of further research aimed at mitigating the adverse effects of MEV on blockchain networks and decentralized finance protocols.
Cherkas et al. (Sun,) studied this question.