Chainfeeds Summary:

MEV is a complex and widespread issue faced by every blockchain. Currently, different public chain ecosystems are adopting different strategies. For example, Solana uses Jito and other private transaction pools to reduce transaction visibility and introduces a tipping mechanism to accelerate transaction confirmation. Ethereum has chosen to adopt the PBS mechanism, making MEV competition more market-oriented and transparent. BNB Smart Chain, on the other hand, has improved the blockchain's processing capacity and shortened block times.

Source:

https://x.com/yzilabs/status/1899812793710493988

Author:

Yzi Labs

Viewpoint:

Yzi Labs: Solana's MEV mechanism mainly relies on Jito, a private transaction pool, whose core function is to temporarily hide user transactions, preventing them from being immediately exposed in the public transaction pool, thus effectively preventing front-running and sandwich attacks. Jito also introduces a market-based economic incentive system, where users can pay additional tips to increase the priority of their transactions, thereby accelerating confirmation and enhancing transaction security. Jito operates through the Jito Bundles mechanism, where searchers submit transaction bundles containing tips, and validators prioritize these transactions when constructing blocks. Over the past year, Jito has processed over 300 million transaction bundles, generating 3.75 million SOL in tips, far exceeding Ethereum's MEV solutions. Due to Solana's high throughput and extremely short block times, as well as the high activity of Memecoin transactions, MEV transactions on Solana exhibit high frequency and low profitability. At the same time, Solana's ecosystem also has independent private transaction pools like DeezNode, allowing searchers to bypass Jito and directly pay tips to validators to obtain transaction priority. Although Solana's MEV ecosystem cannot completely eliminate MEV, it achieves a relatively balanced competitive relationship between users, bots, validators, and searchers through a market-based approach.

Ethereum has been a focus of MEV research, with the foundation and related research institutions proposing the Proposer-Builder Separation (PBS) mechanism and collaborating with infrastructure projects like Flashbots to establish a transparent MEV auction system, making the MEV extraction process more standardized and fair. Ethereum L1's past MEV revenue has exceeded $500,000 per day on average in 2023, but as the L2 ecosystem expands, L1's MEV revenue is expected to stabilize around $300,000 per day by 2024. After entering 2025, while MEV transactions will remain active, overall profitability will decline significantly. Data shows that on March 4, 2025, the total MEV transaction volume reached $562 million, with sandwich attacks accounting for 51.56%, but the actual profit was only $6,320, representing 4.11% of the total MEV profit. This downward trend is mainly due to increased MEV competition, optimization of institutional trading strategies, and improvements in anti-MEV infrastructure. Due to Ethereum L1's high gas fees, most retail traders have shifted to L2 or other low-cost chains, with L1 now primarily dominated by institutions, whales, and professional market makers. As MEV profits decrease, institutions are widely adopting strategies like TWAP and DCA to mitigate MEV impact, and more users are leveraging private transaction pools, batch auctions, and order flow auctions to reduce transaction visibility. Ethereum's MEV ecosystem is undergoing structural changes, with future MEV opportunities likely to shift more towards L2, while L1 will remain the core venue for institutional DeFi trading, with competition focused on cross-chain arbitrage, liquidations, and more complex MEV strategies.

Although the MEV controversy in the BSC ecosystem has received widespread attention, its actual impact is not significantly more severe than Ethereum. According to Dune data, the proportion of sandwich attacks in BSC DEX transactions has gradually increased since the second half of 2024 and surpassed Ethereum for the first time in December 2024. However, in the long-term trend, the proportion of sandwich attacks on BSC and Ethereum has remained below 8%, and reached a peak in February 2025 before declining to around 4% on BSC. This fluctuation is mainly influenced by the activity of popular token trading on the BSC chain, where users often set a higher slippage tolerance to ensure transaction execution, indirectly providing arbitrage opportunities for sandwich attacks. Although many wallets and nodes provide MEV protection mechanisms such as private transaction pools and private RPC endpoints, some users have not actively chosen these protection options or believe that using private transaction pools may slow down transaction confirmation. During peak trading periods, paying higher transaction fees can actually allow transactions to enter blocks faster, so public transaction pools are still the preferred choice for many users. BSC's current MEV mechanism is similar to Ethereum's PBS system, with transaction ordering determined by builders and submitted to validators for processing. Some builders provide private transaction pool services, but as transactions can still be identified in the public pool by searchers, users still face MEV risks. To optimize the MEV ecosystem, BSC plans to reduce the exposure time of transactions in the public pool by shortening block times (to below 750ms) and explore private transaction pool solutions based on Trusted Execution Environments (TEE) to achieve better transaction privacy protection and fairness.