Written by: Ali

Compilation: Deep Tide TechFlow

With the continuous development of blockchain technology, MEV has become a topic of much attention. The MEV market is a complex and ever-evolving field, therefore, the classification presented in this article may evolve over time. But in any case, researcher Ali provides a detailed MEV market map in this article, exploring the complex world of MEV in 3 different categories:

1. Infrastructure;

2. Solutions;

3. Apply.

I. Infrastructure layer

Starting with the infrastructure layer, which consists of "validators and staking participants". As anticipated from our early MEV research, the emergence of MPSV (MEV Profit Sharing Validators) has changed the market landscape, with many validators now offering enhanced MEV rewards alongside traditional staking rewards. We observed the rise of MPSV and LSD in different chains offering MEV rewards. Some notable validators that offer MEV rewards to stakers include Cogent, Chainflow, Chorus One, and Stakefish.

Similarly, on the LSD side, a number of protocols are distributing MEV rewards among stakers, such as Manifold, Frax, Rocketpool, Laine (StakeWiz), Marinade Finance, and Lido. These market participants offer MEV rewards in addition to the rewards from pure staking.

Above this subcategory we find the core Block Builders and Relay participants. Block builders are highly specialized actors who build blocks based on sequential streams of transactions (public transactions, bundled transactions, private transactions, etc.). The relay accepts blocks from builders and chooses the most profitable block for the current proposer.

In the category of block builders, there are special players such as the Skip protocol (Cosmos) that provides sovereign MEV infrastructure. Sovereignty means that Skip is creating modular tools that allow application chains to fully control and customize transaction preference rules. Another participant is Jito, which, as MPSV, has its own liquid staking Derivatives, jSOL.

Each blockchain ecosystem typically has its own provider of MEV block builders (Ethereum may have multiple providers). Some examples include: Skip/Cosmos, Jito/Solana, Flashbots/Ethereum, Fastlane/ Polygon. Two key insights emerged from this analysis:

1. We anticipate that existing (or new) blockchain ecosystems will continue to develop their unique providers of block builders . Leaders may emerge within each chain, reaping the benefits of increasing economies of scale.

1. There is a clear need for a cross-chain MEV solution , which should lead to collaboration with existing block builders to meet this need.

II. MEV Solutions

The MEV solution consists of a series of tools and protocols designed to help detect, prevent or pervade MEV across the ecosystem. One of the most notable subcategories of this segment is MEV Cross-chain coordination spearheaded by leaders such as Skip Protocol, Suave, and Anoma. The growing popularity of Cross-chain, composability, and modularity naturally paves the way for novel Cross-chain and blockchain MEV solutions.

Another interesting subcategory is the (shared) Sequencer section, which focuses on second-layer scaling solutions. A shared orderer mitigates MEV-related risks by promoting fair and consistent ordering of deals, thereby limiting opportunities for frontrunning deals and bots to exploit profitable deals.

Other emerging areas include NFT-related MEV solutions such as Pikapool, which aim to create a specific NFT mempool and reduce any negative externalities of MEV. Other NFT-focused tools include snap-offs and scarcity lookup tools, which arbitrageurs can leverage to maximize profits and trade NFTs.

Finally, a new category that we think is about to start growing will be the gaming MEV tools market .

Blockchain games are interesting because it usually involves Defi (ie game tokens) as well as NFT (ie game assets). As we see more and more innovation in the gaming space and the development of the crypto gaming industry, we believe the time is ripe for MEV to enter. We saw MEV enter Defi, then NFT, and considering that the main component of on-chain gaming is NFT - it is only natural that MEV plays a vital role here, especially regarding user experience. Existing MEV players will capture this market, or we may see some new players emerge.

Some early examples of long tail gaming MEV are mgnr developing a free market to sell locked $JEWEL tokens from Defi Kingdoms - this opens the door to various arbitrage opportunities for Liquidity gaming tokens .

III. MEV Application Layer

The application layer includes end-user products across the MEV ecosystem. On the one hand, many DEXs and aggregators emphasize MEV prevention. On the other hand, other markets and trading platforms often encounter MEV arbitrage and liquidation.

An interesting category we are also seeing is a niche specific market for block space and order flow payments. Examples of this include Alkimiya and DFLOW. It will be interesting to see how these markets are leveraged and what new use cases emerge from them.

We predict that two important classes will emerge at this layer:

1. A marketplace for NFTs and games secured by MEV . Examples of NFT MEV include bot activity during Mint, arbitrage opportunities involving floor prices, or the liquidation of NFT loans. In terms of prevention, we specifically refer to mitigating bot activity. As mentioned earlier, the growing popularity of on-chain gaming will likely introduce various forms of MEV into the space. Therefore, gaming platforms must adapt their protocols to meet these challenges.

2. MEV wallet. Wallets are the hub between users and dapps, and we hope wallets will start partnering with MEV solution providers or block builders to help users recapture any MEV slippage they may encounter, or even new forms of MEV.

In conclusion, the MEV market map provides a comprehensive overview of the complex and dynamic world of MEVs. We remain committed to working with the wider community to refine and update this resource as the marketplace continues to evolve. Together we can traverse the "dark forest" of MEV and light the way to a more transparent, secure and fair blockchain ecosystem.