Flashbots, a research and development organization backed by Paradigm, is focused on fighting the downside of current miner extractable value (MEV) extraction strategies. And here’s how it adds value to the Ethereum network.
DeFi traders’ arbitrage of MEV affects Ethereum transactions
Miner extractable value measures the profit a miner could make through their managing of transactions in the blocks they create. The “conventional” source of profit would be transaction fees and block rewards from the consensus system.
However, Flashbots points to “‘unconventional’ profits from transaction reordering, transaction insertion, and transaction censorship within the block a miner is producing” as the negative aspect of MEV.
According to the organization, “the MEV present on Ethereum today is predominantly captured by DeFi traders through structural arbitrage trading strategies” as opposed to miners.
The strategy used by DeFi traders to arbitrage MEV is “front-running.”
Źródło: https://cryptoslate.com/how-flashbots-fighting-mev-extraction-help-the-ethereum-network/
