MEV in the Ethereum of Tomorrow

Proof of stake significantly affects MEV.

PoW-style SGX protection will break

• Solution 1: rely on doubly-trusted intermediaries ("relays")
• Solution 2: in-protocol PBS, use committee signatures as decryption trigger

The next proposer is known

• Proposer is known, but has a time limit of when to propose
• They may gain an advantage from delaying until the last possible moment, and risk being not included, to gain more MEV
• There arises the possibility of making side deals with the proposer

Minimizing trust in the builder market

• Today: builders need to trust miners
• MEV boost: builders and stakers need to trust relayers
• In-protocol PBS: no trust

Danksharding

• Will make some kind of separation mandatory (as regular validators can't handle full 32 MB blob contents)
• Option 1: PBS + sophisticated builder
• Option 2: status quo + "availability oracle"
• Option 3: builder + availability oracle

Layer 2 protocols

HERE BE DRAGONS

Key question: how is rollup sequencing controlled?

If "anyone can submit", then an optimal builder can just understand optimize MEV on both the base layer and the rollup, and put the MEV-maximizing rollup data tx into the block.

If the rollup controls submission, then the situation is similar to cross-chain MEV.

Two possible worlds:

1. (NO MERGING) rollup sequencers just submit their blob transactions, and they get included
2. (MERGING) whoever controls rollup sequencing makes sure to also win the block auction, or sell their sequencing right to the winning builder

What do we want out of an MEV landscape?

My goal: insulate the Ethereum base layer from centralizing tendencies of complicated stuff happening on top of / around Ethereum.

• L2s may help!
• PBS may also help!
• But if they are not enough, what protocol-level reform could get us all the way there?