Key Takeaways
Maximal Extractable Value (MEV) is value extractable by temporary monopoly power commonly found in decentralized systems. It stems from a lack of user privacy upon transaction submission and the ability of a monopolist validator to reorder, add, and/or censor transactions.
There are two main directions to reduce MEV: reduce the flexibility of the miner to reorder transactions by enforcing ordering rules and/or introduce a competitive market for the right to reorder, add, and/or censor transactions.
This paper unifies these approaches via uncertainty principles, akin to those found in harmonic analysis and physics, providing a quantitative trade-off between the freedom to reorder transactions and the complexity of an economic payoff to a user in a decentralized network.
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