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What Is MEV?

Maximal Extractable Value (MEV) is profit captured by changing transaction ordering, insertion, or censorship. It appears wherever pending intent is visible and ordering rights exist.

Who Extracts MEV:

  • Searchers: craft arbitrage, liquidations, sandwich bundles
  • Builders/Relayers: order bundles; sell flow; back‑order across flows
  • Proposers/Validators: finalize ordering within protocol rules

Common Patterns

  • Sandwiching DEX Swaps — buy before a visible large swap, sell after to harvest slippage
  • Backrunning Liquidations — race to execute liquidation as a position crosses a threshold
  • JIT Liquidity On AMMs — add liquidity for one trade, collect fees, remove
  • Oracle/OEV Timing — trade around oracle updates to affect downstream protocols
  • Cross‑Venue Arbitrage and NFT Sniping — exploit price gaps or pending listings

Further reading on builders: galaxy.com/insights/research/mev-the-rise-of-the-builders

Why Private RPCs and Private Mempools Fall Short

  • Orderflow Auctions (OFAs) & Private RPCs — flow can still be sold; builders can back‑order across flows
  • “Private Mempools” & Encryption In Transit — metadata and timing leak intent; bundle markets persist
  • Offchain Trust and Censorship — wallets/RPCs/relays are choke points; operators can reorder or delay

Conclusion: as long as contents are visible pre‑finality, ordering rights can extract value.

The Only Durable Fix: Protocol‑Level Privacy

  • Commit‑Then‑Reveal — include and finalize encrypted transactions, reveal only after finality
  • Threshold Encryption of Intent — encrypt to and data under committee keys; no one previews or sells flow
  • Deterministic Security — breaking privacy would require substantial committee collusion, not offchain promises

How BITE Neutralizes MEV

  • Encrypted Inclusion — transactions propagate and are included while to and data remain concealed
  • Post‑Finality Decryption — validators decrypt just‑in‑time (JIT) for EVM execution
  • Wallet Compatibility — standard Ethereum transaction format; no wallet/RPC changes required

Result:

  • Sandwiching — hidden pools/pairs/amounts → no front‑/back‑run crafting
  • Liquidations — hidden health/payoff → no profitable race window
  • OEV — dependent calls concealed → ordering games around updates fade
  • Flow Markets — encrypted intent → nothing to sell or back‑order

What Still Remains

  • Fees & Priority: tips/priorities remain; protocol fees still apply
  • External‑Domain MEV — other chains/venues still have MEV; FAIR removes FAIR‑side visibility
  • App Safety Rails — keep slippage/deadlines as backups, not primary defense

Deeper Reading