Key Takeaways
Maximal Extractable Value (MEV) has generally been viewed as a negative, parasitic aspect of economic transactions on blockchains that increases costs for nonstrategic users.
This note demonstrates, however, that if rational validators in Proof of Stake (PoS) protocols are able to earn a portion of MEV revenue, by a process we call MEV redistribution, they are disincentivized to unstake and lower economic security.
The note outlines a joint staking-lending dynamical system in which a fraction of MEV revenue is used to increase staking returns.
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