![]() ![]() Why is it important? In proof-of-work and proof-of-stake systems, miners and validators have the power to manipulate the order of transactions to their advantage, potentially extracting additional value from the transactions, before a block is added to the blockchain. Such an initiative was also started on the Flashbots forum in October 2022 or by other projects such as mev-bor and Fastlane. This initiative was initially started with the FlashBabies report which focuses on the impact of MEV on L2s such as Polygon and Optimism. Some potential solutions we are working on to address such behavior would be to quantify the impact of MEV on Polygon PoS. However, over time, the expectation is that the profitability of the arbitrage contract will outweigh these initial losses, ultimately compensating for them. Initially, engaging in transaction spam to drive up fees may result in some financial loss. In the context of the arbitrage contract, due to the high throughput and low transaction fees on the Polygon PoS network, a strategy of spamming transactions can be seen as advantageous. ![]() Some MEV activities are useful for DeFi projects as well as users such as arbitraging MEV, to ensure that users get the best prices for their tokens. This is considered "bad" MEV because it impacts users negatively, causing huge gas spikes on the network. PGAs create an environment where bots compete against each other by bidding up transaction fees (gas) which drives fees for other users. On the Polygon network and other Layer 2 blockchains, without the existence and adoption of solutions like Flashbots by the validators, most of the MEV activity resolves into Priority Gas Auctions. There are different forms of MEV, including DEX arbitrage, liquidations, sandwich trading, NFT MEV, etc.Ĭoming back to our suspicious smart contract spamming transactions. Wait, what does MEV mean? MEV stands for Maximal Extractable Value which refers to "the maximum value that can be extracted from block production in excess of the standard block reward and gas fees by including, excluding, and changing the order of transactions in a block", credits to for the definition. But why was this smart contract spamming expensive transactions on the network? That's a great reason to dive into the MEV rabbit hole! □Fasten your seat belt, this is going to be fun! ![]()
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