The Specter (and Spectra) of Miner Extractable Value

ArXiv ID: 2310.07865 “View on arXiv”

Authors: Unknown

Abstract

Miner extractable value (MEV) refers to any excess value that a transaction validator can realize by manipulating the ordering of transactions. In this work, we introduce a simple theoretical definition of the ‘cost of MEV’, prove some basic properties, and show that the definition is useful via a number of examples. In a variety of settings, this definition is related to the ‘smoothness’ of a function over the symmetric group. From this definition and some basic observations, we recover a number of results from the literature.

Keywords: Miner Extractable Value (MEV), Transaction Ordering, Blockchain Economics, Game Theory, Symmetric Group, Cryptocurrency/Blockchain Assets

Complexity vs Empirical Score

• Math Complexity: 7.5/10
• Empirical Rigor: 2.0/10
• Quadrant: Lab Rats
• Why: The paper uses abstract group theory (symmetric groups), functional analysis (smoothness, spectral properties), and optimization theory to define the cost of MEV, indicating high mathematical density. However, the work is purely theoretical, providing definitions, bounds, and examples without any backtested data, implementation details, or statistical validation, placing it firmly in the theoretical ‘Lab Rats’ category.

  flowchart TD
    A["Research Goal:<br>Define 'Cost of MEV' theoretically"] --> B["Methodology:<br>Formalize MEV cost as smoothness of functions over symmetric group"]
    B --> C["Data/Inputs:<br>Transaction ordering manipulations & blockchain data"]
    C --> D["Computational Process:<br>Mathematical proofs & examples analysis"]
    D --> E["Key Findings:<br>1. New MEV cost definition<br>2. Relation to symmetric group smoothness<br>3. Recovery of existing literature results"]