Thread by @analyticalali

🌌🌲Navigating the Dark Forest: Unraveling the Mysteries of the MEV Market 🌲🌌

After spending weeks researching, we've mapped the complex #MEV Market Landscape! Explore the intricate world of the MEV stack across 3 categories: 1. Infrastructure
2. Solutions
3. Applications
👇

Full blog post here:
mirror.xyz/0xfE32bbB2DdB1…

Before we dive in:

The MEV market is a complex and an ever-evolving domain. As such, the categorizations presented here may evolve over time. We view this landscape as just one perspective.

We welcome feedback as well as collaboration to update this - please reach out!

1/🏗️ Infrastructure Layer: Starting from the foundation, we first examine Validators & Staking.

In our earlier MEV research, we hypothesized the rise of MEV Profit Sharing Validators. Seeing this play out has been fascinating, it is now standard to offer MEV rewards to stakers.

1b/ Validators and LSDs now offer MEV yield in addition to staking rewards. MEV Rewards are socialized amongst stakers.
Validators: @laine_sa_ @MarinadeFinance @ChorusOne @Cogent_Crypto @stakefish
LSDs: @fraxfinance @foldfinance @LidoFinance @Rocket_Pool
Restaking: @eigenlayer

1c/ 🔨Block Builders & Relays:

Block Builders construct blocks from various transaction orderflows.

Relays accept blocks from builders, and pick the one with highest profit for the current proposer.

1d/ In the Block Builder category we have specialized actors like @SkipProtocol, @jito_labs.

Skip is creating "sovereign" modular tools that allow app-chains to fully customize rules around transaction preferences & MEV.

@jito_labs enables MPSVs, and provides its own LSD.

2/🔗 MEV Solutions: This category houses tools & protocols for extracting, preventing, or democratizing MEV. Exciting subcategories include MEV Cross-Chain Coordination (@SkipProtocol , Suave, @anoma ) & Shared Sequencers for Layer-2 scaling solutions.

2b/ MEV-Cross-Chain Coordination: The increasing prevalence of bridging, composability, and modularity naturally paves the way for novel cross-chain and inter-chain MEV solutions - which is why we are very excited about this category.

2c/ Shared Sequencers mitigate MEV-related risks by facilitating fair and consistent transaction ordering, thereby limiting the opportunities for frontrunners and bots to exploit profitable transactions.

Good thread here from @divine_economy

https://twitter.com/divine_economy/status/1643995475216039938?s=20

2d/🖼️ [Emerging] NFT-Related MEV: @0xPikapool pioneers NFT minting, reducing MEV externalities. Sniping & rarity tools help arbs maximize NFT floor trading profits.

We see NFT MEV as a growing ecosystem,

2f/ Orderflow Auctions: This refers to designs that aim to return users the value they create via their order. Source: @thegostep @ankitchiplunkar

frontier.tech/the-orderflow-…

2g/ The rise of Gaming MEV Solutions

On-chain gaming is composed of Defi (tokens) + NFTs => only natural that MEV will be massive in Gaming.

Early examples of Gaming MEV:
1. @DeFiKingdoms marketplace for locked illiquid $JEWEL tokens

2. Ape token MEV:

https://twitter.com/wilburforce_/status/1504437189979119622?s=20

3/💻 MEV Application Layer:
End-user products span the MEV ecosystem, from
(1) DEXs & Aggregators focusing on MEV prevention to
(2) marketplaces & trading platforms encountering MEV arbitrage & liquidations opportunities.

3b/ We also see Niche Marketplaces: @alkimiya_io & @DFlowProtocol exemplify blockspace & payment-for-order-flow niche markets.

We are actively watching for new use cases & innovative leveraging in this category.

3c/🎮 [Emerging] NFT & Gaming Marketplaces: MEV protection needed as botting, floor price arbs, & liquidations emerge in NFT loans.

On-chain gaming platforms will face MEV challenges & must adapt protocols accordingly.

3d/🔐 [Emerging] MEV Wallets:

Wallets are the gateway between users & dApps. We expect partnerships with MEV solution providers or block builders to help users recapture MEV slippage or explore new MEV forms for end users.

🌱 In conclusion, this is one path through the Dark Forest of the MEV Market Landscape. We'll keep refining & updating this resource with community collaboration.

💡 Together, let's navigate the rest of the "Dark Forest" of MEV and illuminate the path towards a more transparent, secure, and equitable blockchain ecosystem.

Please join the conversation & share your thoughts!

Special thanks to everyone who helped review and offer feedback, it really means the world to me!
@thegostep @hasufl @BPIV400 @buffalu__ @segfaultdoctor and @CraigBurel

Our initial article on The Rise of MPSVs:
recvc.com/mev-2-0-the-ri…

@AlanaDLevin has some epically good research here.

great thead on Skip's Sovereign MEV here:

https://twitter.com/blockworksres/status/1646532798533222400?s=20

@EffortCapital

SS: @EspressoSys @AstriaOrg Radius