Miners' Extractable Price (MEV) is the value that miners gain by changing the order of transactions in the blocks they create. There are problems in order fairness of unlicensed power cryptocurrency. If the quality is high enough, MEV can reward blockchain hackers. This may have a negative impact on future transactions and security layers. In addition, MEV attacks are common. The following are the most common MEV attacks:

NFT MEV

Searchers in NFT market can use MEV extraction strategy. A searcher paid $7 million to buy all the password punks in the venue. This is a well-known example of NFTMEV. NFT can also be purchased at a discount, if it is occasionally released at a low cost, allowing buyers to bid higher than other buyers.

Liquidation

Liquidators are experts in clearing excess mortgage debts. They withdraw MEV from Maker and Aave and other loan agreements. These agreements use collateral deposited in Ether (ETH) to lend money to other users. They are called liquidators. Users can borrow tokens and assets from other users up to the limit of collateral they deposit. In addition, the agreement allows anyone to sell collateral and quickly repay the lender when the value of borrowed assets exceeds the value of collateral due to market fluctuations.

In order to quickly determine which borrowers are eligible for liquidation and become the first person to submit a liquidation transaction and receive a liquidation fee, searchers try to liquidate collateral as soon as possible. MEV opportunities arise because if the loan is cancelled, the borrower sometimes needs to pay a large liquidation fee. This part belongs to the liquidator, that is, the searcher.

Attacks by bandit uncles

You may wonder what the "uncle" here means. In fact, when two blocks are mined at the same time and broadcast with the same block number, uncle blocks are generated. The uncle orphan block is the second block left after the specification block, and receives greater verification through the node.

Transactions in uncleared blocks can be made public, providing MEV opportunities for attackers or searchers. For example, when flash bots users (searchers) submit sandwich transactions (bundled transactions), they can arbitrage after obtaining the purchase part of the sandwich. Miners running MEV Geth can also bypass the public memory pool and directly submit bundled transactions to the verifier.

MEV – Geth is the gateway of Ethereum network. It can run as a full or archive node, or as a lightweight node. In addition to the unfinished transactions from other Ethereum users retrieved from the memory pool, these transaction packages often contain transactions from searchers. The verifier is encouraged to include the bundle in their block, because they can get 80 – 90% of the rewards that the searcher gets.

Time Bandit Attack

Time bandit attacks attempt to reverse blockchain transactions. For example, if the searchers find extremely profitable MEV opportunities in the previously verified blocks, they can propose to change the historical process of Ethereum and re verify these blocks to take advantage of the opportunities they just found. They provide the verifier with a profitable incentive to cancel the transaction.

Because this attack allows anyone to issue proposals to modify the blockchain history, they serve as a tool to auction the consensus of the current state of the chain to the highest bidder, thereby endangering the integrity of the Ethereum network.

summary

The above content describes several common MEV attacks. Chainlink's solution to MEV problem is called Fair Sorting Service (FSS), which is a decentralized transaction sorting service that can ensure the fairness and predictability of transaction time sorting for all users and help reduce MEV. The smart contract economy can be expanded by using the second level aggregation such as Arbitrum. FSS can be used to rank transactions and apply to the exact tier 2. This reduces the impact of MEV.