Evolution of MEV Landscape: Changes One Year After Ethereum Merge

In the year following the ETH merge, the market share of MEV-Boost has stabilized at around 90%. Currently, the complexity of MEV is extremely high, with non-user roles including seekers, builders, relayers, validators, and proposers, who engage in multi-party games within a 12-second block time to seek their respective maximum benefits.

This article will compare the profit margin changes before and after MEV, outline the lifecycle of MEV after the merge, and share some insights on cutting-edge issues.

1. MEV profits dropped significantly after the merge

According to data analysis:

• The average MEV profit from September 2021 to September 2022 before the merge is 22MU/M.
• One year after the merge from December 2022 to September 2023, the average MEV profit was 8.3 MU/M.

After excluding hacker incidents that should not be attributed to MEV, the overall return rate has decreased by about 62%. It is important to note that there are differences in statistical methods across platforms, so this is only a macro verification and not absolutely precise.

( 2. Traditional MEV model

MEV), or maximum extractable value, is primarily captured by DeFi traders through arbitrage strategies rather than being directly extracted by miners. There are clever hackers on-chain continuously exploiting contract vulnerabilities, but they face the dilemma of how to secure profits without being front-run.

The dark forest exists not only on-chain but also in the node network. Some nodes only accept P2P connections but do not propagate transaction pool data, attempting to increase MEV profit margins by controlling the flow of information.

( 3. MEV model after the merge

After the ETH merge, the block interval became stable at 12 seconds, and the miner incentives decreased. This encouraged validators to be more willing to accept MEV transaction auctions, causing the MEV market share to quickly reach 90%.

The transaction lifecycle after the merge involves roles such as seekers, builders, relayers, proposers, and validators.

1. Builders receive transactions from various sources to create blocks
2. The builder submits the block to the relay
3. Relay validates the block's validity and calculates the rewards
4. The relay sends the transaction sequence package and revenue price to the block producer.
5. The block proposer evaluates and selects the sequence package with the highest yield.
6. The block producer sends the signed header back to the relay.
7. After the block is published, rewards are distributed to builders and proposers.

![ETH merge一周年后的MEV格局演变])https://img-cdn.gateio.im/webp-social/moments-74f5f5cf4a523cb12518a989b34dbc2d.webp###

( 4. Summary

1. MEV-Boost reshapes the transaction lifecycle, breaking it down into finer segments and increasing the competition among participants.

2### Cutting-edge exploration includes privacy trading, fair trading, and improving PBS, among other directions.

3( Ethereum has a certain resistance to OFAC scrutiny; as long as not 100% of the validators comply with the scrutiny, it is equivalent to 0%.

4. The lack of incentives for relayers is a potential issue that may lead to centralization. In the future, profits may be obtained through methods like MEV-share.

5( The growth of ERC4337 account abstraction wallets is rapid, which may increase MEV difficulty in the short term, but in the long run, it is unstoppable.

6. DeFi and CeFi each have their advantages, targeting different audience groups.

7### Layer-2 adopts different solutions to handle MEV, such as Optimism's MEVA and Arbitrum's FSS, which to some extent eliminate MEV from miners.