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Looks like: Da Hongfei, founder of Neo
Decentralized, permissionless and transparent. These are the principles that attracted many of us to the blockchain ecosystem. This vision is always undermined, however, by an insidious, often invisible force: Maximum extractable value (MEV).
MEV is not inevitable; it’s a choice. Too many treat it as an inevitable byproduct of blockchains. It is not. MEV is engineered into incentives, and can be engineered. Left unchecked, it becomes a hidden tax, a form of censorship, and a direct assault on equity and decentralization.
Tolerating that drains user confidence and prevents adoption. Removal, on the other hand, protects users and signals a credible, future-proof infrastructure. Building fair systems means building ecosystems that are more competitive and investable.
Builders, developers, users and investors need to recognize this threat and come together to eliminate it; it is both an ethical imperative and a strategic necessity on which the future of Web3 depends.
Censorship hidden in plain sight
The maximum extractable value is the maximum profit that a block producer can capture by manipulating the transaction order. Some argue that there are neutral forms of MEV, such as simple decentralized exchange arbitration, but most are harmful. This “toxic MEV” is financial censorship that undermines security, permissionlessness and decentralization.
The most common examples are block networks, time bandit attacks, front-running and sandwich attacks. Each rearranges transactions to extract value at the expense of the user. These are not benign tricks of the trade. They are deliberate manipulations that subvert user intent and erode trust. Allowing it is a political choice, not a law of nature.
Invisible taxes and unwanted centralization
Toxic MEV is a symptom of centralization in systems designed to resist. No actor should ever control the transaction order. Yet MEV consolidates power among a host of extractors who exploit the results.
The result is an uneven playing field. When users fear being in front or sandwiched, they lose faith in the integrity of the system. This trust deficit is fatal to long-term adoption. Worse still, MEV distorts incentives. Instead of rewarding builders who strengthen the network, funnels reward those who exploit. That misalignment is an existential threat to blockchain credibility.
Related: Ethereum must limit transparency for a fairer blockchain
For investors, this is more than a technical issue. It’s a government red flag. Chains that choose to tolerate the fragility of the MEV signal. The chains that choose to brake the resistance of the signal. Solve MEV it is not only a moral stance, but a competitive advantage.
The massive scale and the deliberate darkness
The label “invisible tax” is apt. MEV costs are hidden but real, amounting to billions quietly drained from decentralized financial participants each year.
In Ethereum alone, MEV mining grew from $78 million in early 2021 to $600 million in 2023. In 2022, at least $133 million was siphoned off. These are conservative estimates. The exact scale is greater thanks to opaque strategies such as MEV multi-block, offchain hedging and untraceable long-tail attacks. This deliberate obscurity compounds the problem. Normalize MEV, and users can never know how much is taken from them. Accept that opacity is, again, a choice.
MEV is neither inevitable nor necessary
Some argue that MEV is a necessary evil. That is a weak justification for inaction.
Proponents say MEV improves liquidity. True arbitrage and market making can thrive in transparent systems that do not rely on privileged transaction orders. Efficiency and fairness can coexist, as experiments with encrypted mempools and random ordering have already shown.
Others argue that MEV incentivizes blockchain producers. But builders already receive block rewards and transaction fees. MEV is excessive and unearned, extracted at the user’s expense.
Perhaps the most dangerous myth is inevitability. Solutions it already exists. Encrypted transactions, fair order protocols, threshold encryption and proponent-builder separation experiments show that toxic MEV can be eliminated or at least minimized without harming performance. Choosing not to follow these paths is complacency disguised as realism.
A call to ethical and collective action
Beyond the technicalities, this is a battle for the soul of blockchain. If decentralization is to mean anything, toxic MEV must be faced head on.
Layer-1 designers must design MEV-resistant protocols from the start. Developers should avoid platforms that depend on exploits. Users must understand that fairness and ethics are not optional extras, but the foundation of decentralized networks. Investors should recognize that the support chains they choose to solve MEV are both principled and cautious.
A fairer blockchain is not only possible, but essential. It will reward those who build it and support it and determine if this technology lives up to its promise of trust and decentralization.
In the end, MEV doesn’t define us – our choices do.
Looks like: Da Hongfei, founder of Neo.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
