🌍 Ecosystem Impact: MEV Supply Chain
Discover how MEV affects users, validators, and protocols
Discover how bots profit from transaction ordering
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MEV has profound effects across the entire blockchain ecosystem. While it provides economic incentives that maintain protocol health through arbitrage and liquidations, it also creates negative externalities like sandwich attacks and network congestion. Understanding these impacts is crucial for building fair and sustainable systems.
The introduction of **MEV-Boost** and **Flashbots** has significantly changed the MEV landscape, making extraction more democratic while reducing harmful effects. However, challenges around centralization, censorship, and user protection remain.
Interactive: Impact Analyzer
Explore how MEV affects different ecosystem participants.
User Impact
✓Positive Effects
- •Better execution through JIT liquidity
- •Lower slippage on large trades
- •MEV-Share rebates (Flashbots)
- •Faster liquidations protect lenders
✗Negative Effects
- •Sandwich attacks cause 5-10% slippage
- •Front-running raises transaction costs
- •Failed transactions waste gas
- •Information asymmetry favors bots
MEV Mitigation Strategies
🔒 Flashbots Protect
Send transactions to private mempool instead of public. Prevents front-running and sandwich attacks. Free to use, no code changes needed—just change RPC endpoint.
💰 MEV-Share
Users get rebates from MEV extracted from their transactions. If searchers profit from your trade, you earn a portion of that profit. Aligns incentives between users and searchers.
📦 Batch Auctions
CoW Protocol batches trades together and finds optimal execution. Prevents sandwich attacks by aggregating orders and matching them internally before hitting AMMs.
⏱️ Threshold Encryption
Transactions are encrypted and only decrypted after block commitment. Searchers can't see mempool contents until it's too late to front-run. Still experimental but promising.
MEV Statistics
• 20% liquidations
• 10% sandwich
• 5% other
• 90% adoption
• Decentralized builders
• $5M+ daily from users
• Flashbots reduces by 80%
• Eden Network
• MEV Blocker