New technological challenges and opportunities emerge as the cryptocurrency ecosystem and DeFi grow
LONDON, UK / ACCESSWIRE / October 29, 2024 / Among them, MEV (Maximum Extractable Value) has become one of the most important challenges facing smart contract blockchains like Ethereum. MEV refers to the way block producers extract value from users by rearranging, inserting, or censoring transactions within blocks. Zenmefu provides a deep analysis of these MEV issues and provides new strategies to protect and efficiently manage user assets.
What is MEV?
MEV represents an opportunity for block producers to generate additional revenue by changing the order of transactions within a block. This allows you to extract significant value from the DeFi ecosystem. MEV is used in various strategies such as front-running, sandwich attacks, and back-running, which can result in unexpected additional costs for users. Notably, in 2024, MEV activity reportedly extracted more than $700 million in value from Ethereum users.
Main types of MEV
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Active on the front lines: A strategy that positions the trade ahead of the target trade to adjust the price advantageously. This mainly happens with DEXs (decentralized exchanges). In DEXs, bots pay higher fees to ensure their transactions are processed before the target's.
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sandwich attack: A technique in which an attacker places transactions before and after the target transaction and adjusts the price to secure additional profits from the target transaction.
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back running: A strategy that executes a transaction immediately after a specific trade. Commonly used when a new token pair is listed on a DEX.
MEV challenges and ZENMEV responses
MEV acts like an “invisible tax” on Ethereum users, contributing to network congestion and higher fees. This degrades the user experience and undermines trust in blockchain decentralization. To address these MEV issues, ZENMEV introduced the Zenbots staking system, a model that redistributes MEV profits to users. ZENMEV fosters a secure environment where users can participate in the benefits of MEV and supports asset safety through additional protection mechanisms and user education.
Changes in MEV after transition to Proof of Stake (PoS)
With Ethereum's transition from Proof of Work (PoW) to Proof of Stake (PoS), the MEV landscape has changed significantly. Validators, rather than miners, now have the power to adjust the order of transactions. The new PoS structure not only enhances network scalability and stability, but also gives verifiers a legitimate opportunity to optimize MEV profits. ZENMEV is actively leveraging these structural changes and continues to research PBS (Proposer/Builder Separation) approaches that allow validators to process MEVs more efficiently and fairly.
ZENMEV's role and future prospects
ZENMEV believes that MEV activities will have a positive impact on the growth of the DeFi market and aims to provide users with a stable and secure MEV revenue model through staking solutions like Zenbots. By increasing transparency around MEV and providing a trusted platform for users within the DeFi ecosystem, ZENMEV plans to provide tangible benefits to users.
ZENMEV continues to develop innovative and secure solutions to address MEV challenges and maximize user asset protection and profitability.
Contact details –
Company name – ZENMEV
Email: [email protected]
Website: https://zenmev.com
sauce: Zenmefu
