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Author: Admin | 2025-04-27
Term MEV (Miner Extractable Value) is a bit confusing. In the plainest interpretation it would include transaction fees, which of course we want paid to miners to help ensure the security of bitcoin long into the future. MEV is generally used to mean additional value that miners can extract from their blocks beyond the fees visible on the public relay network. This could come in the form of out of band payments, miners participating in contracts and reordering transactions in ways that favor themselves, or even outright theft of goods and services by miners mining blocks that reorg and double spend a confirmed payment to a merchant. All of these forms of MEV can be considered generally bad for the participants in the network, as the miners are using their position in the network to their own benefit at the expense of other network participants. However, MEV alone does not present a systemic problem by driving miner centralization, only a local problem for the specifically impacted participants.MEVil is a term that is sometimes used for MEV which drives miner centralization – I prefer the term centralizing MEV and will use it going forward. Several things are necessary to change MEV into centralizing MEV:It must be sufficiently difficult to extract that an open source block template builder cannot reasonably extract itThe total value extractable must grow with a miner’s bitcoin hash rateThe extractable value must justify the cost of extractionIf all of these requirements are met then only a sufficiently large miner will have the incentive to begin extracting the MEV. Once they do, they will be able to outpace their smaller peers’ growth thanks to the additional revenue extracted. The more costly the MEV is to extract (up to the point where it is not worth it for any miner)
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