Rolling in the Shadows: Analyzing the Extraction of MEV Across Layer-2 Rollups
Christof Ferreira Torres, Albin Mamuti, Ben Weintraub, Cristina Nita-Rotaru, Shweta Shinde
Abstract
The emergence of decentralized finance has transformed asset trading on the blockchain, making traditional financial instruments more accessible while also introducing a series of exploitative economic practices known as Maximal Extractable Value (MEV). Concurrently, decentralized finance has embraced rollup-based Layer-2 solutions to facilitate asset trading at reduced transaction costs compared to Layer-1 solutions such as Ethereum. However, rollups lack a public mempool like Ethereum, making the extraction of MEV more challenging.
Topics & Concepts
Asset (computer security)Database transactionLayer (electronics)Extraction (chemistry)Transaction costValue (mathematics)BlockchainComputer scienceBusinessFinanceDatabaseComputer securityMaterials scienceNanotechnologyMachine learningChromatographyChemistryBlockchain Technology Applications and SecurityComplex Systems and Time Series AnalysisMarket Dynamics and Volatility