On Feb. 7, Binance founder Changpeng Zhao posted a poll on X asking if BNB Chain should eliminate/aggressively reduce Maximal Extractable Value (MEV) issues.
MEV issues reportedly cost BNB Chain users over $1 billion in the 2020s. Sure enough, over 80% of users voted for eliminating MEV issues.
What is MEV?
The term Maximal Extractable Value refers to the maximum amount of fees extracted by a validator of network transactions through reordering or rearranging the transactions waiting to be included in the block.
The move allows validators to orchestrate the price changes on the market, adjusting the price movements by changing the sequence of the orders. For that reason, MEV is sometimes called an “invisible tax.”
The problem was first outlined in 2014 when an anonymous Reddit user expressed concerns over potential front-running by the miners in the Ethereum network. Long before the DeFi bloom, the commentator nailed the possible abuse of the system very clearly:
For example, in an ethereum decentralized stock exchange, I could run a miner (or rather many miners) processing exchange transactions. When a large buy order comes in, I could delay it on all my miners, put a buy order in myself on all my miners simultaneously, and then process the original transaction. I would get the best price and could possibly even sell to the originator for an immediate profit.
Although MEV is widely associated with the Ethereum network, BNB Chain users faced serious problems with it. As we can see from their votes, they had had enough.
Various manipulations take place on Automated Market Making platforms via bots. One of the nastiest MEV attacks is called the “sandwich attack.” The name sandwich attack refers to placing a target order between two orders of the bad actor to manipulate the price and close the position at the more favorable price.
In 2021, BNB Chain users allegedly lost around $300 million in sandwich attacks. However, the peak harm was reported in 2024, when a single bot squeezed around $40 million in sandwich attacks within three months, while the overall cost of sandwich attacks amounted to $1.5 billion.
The share of the affected blocks reached 35.5%.
Why not eliminate MEV issues?
Should the BNB dev team step introduce solutions that limit MEV attackers, or should everything stay the way it is? There is no single answer to this question. The concerns over the MEV attacks are not hard to grasp. These attacks are deemed unethical, as bad actors exploit the network vulnerabilities to gain profits from people exchanging crypto.
Bots act in the blink of an eye, and a well-organized automated trading system may exploit MEV opportunities at a speed not approachable for a human being. Unsuspecting traders will pay for the profits made by someone who is taking advantage of them via automated trading.
Front running clashes with the law, and front running in crypto is still rather a gray zone. It is not prohibited, as this vulnerability is seen as inherent to decentralized platforms. However, considering the damage scale, reducing the opportunities for MEV attacks through technical advances has been praised by many, and the Zhao’s poll reveals it.
Why do many respondents prefer to keep the MEV issues intact, though? First off, many believe that MEV opportunities lie in the very DNA of decentralized finance, and there is no way to delete them. Others find MEV alright as while it is an exploit, it is not a violation, and as long as MEV is just an opportunity to earn some extra, they do not see the reason to oppose it.
Finally, observers argue that the opportunity for MEV attacks incentivizes more validators. This, in turn, boosts decentralization and makes the network safer for all.
Generally speaking, the “MEV issues” are the price people pay for using the decentralized finance spaces.
This approach ignores the similarities between such an MEV trick as the time bandit attack and the infamous 51% attack, which is the very opposite of decentralization and safety for all.
What are the possible solutions?
Zhao himself admits that MEV-related problems cannot be “completely” stopped, but there are ways to reduce the harm.
One of the tools helping to fight against MEV attacks is called remote procedure calls. RPCs direct transactions to a private mempool, making it harder for the bad actors to deploy sandwich attacks.
Another solution that has been in the works since 2023. The so-called Proposer-Builder-Separation (PBS) model outsources the proposals of the blocks to separate actors who prepare blocks for validators who choose the most lucrative options but cannot exploit them. Increasing the number of relays of the BNB Chain may be another way to limit the impact of the MEV attacks.
Given that there are already several solution projects in the works and the amount of money made through the MEV attacks, the high support for the MEV reduction doesn’t seem surprising.
