Ethereum Struggling With MEV Bots, Executive Argues That Solana Has Succeeded

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As a crypto investor with experience in both Ethereum and Solana, I’ve noticed some significant differences between the two networks when it comes to transaction processing and gas fees. While Ethereum relies on a pool of validators to confirm transactions and prioritizes them based on gas fees, Solana actively subsidizes most of its validators and discourages MEV bots through penalties.

As an analyst, I’d rephrase it this way: Instead of following a first-in, first-served approach like Bitcoin, Ethereum and Solana utilize a pool of validators to authenticate transactions and incorporate them into the subsequent block. By doing so, these platforms offer more flexibility. Users can prioritize their transactions by paying higher fees to secure faster confirmation.

At the foundational level of interaction between systems, giving preference to transactions based on gas fees has unwittingly fueled the emergence of intricate Maximal Extractable Value (MEV) automated bots on Solana and Ethereum. Leveraging the system’s loopholes, these bots have gained substantial influence in the ongoing discourse surrounding gas fees.

MEV Bots Pushing Gas Fees Higher On Ethereum?

As a researcher delving into the ongoing discourse regarding validators, gas fees, and the influence of MEV bots on Solana and Ethereum, I’ve come across an intriguing revelation shared by Mert Mumtaz, co-founder of Helius, the Solana RPC provider. He brought attention to a singular sandwich bot, Jaredfromsubway, which emerged as the leading contributor to exorbitant gas fees on Ethereum.

This bot handles an impressive daily transaction volume of 142 ETH, outpacing the fees incurred by notable entities such as Coinbase.

Ethereum Struggling With MEV Bots, Executive Argues That Solana Has Succeeded

As a crypto investor, I’ve noticed the significant increase in gas fees on Ethereum due to MEV bots. The co-founder of a related project has raised concerns that by not subsidizing validators, the Ethereum Foundation is inadvertently allowing MEV bot operators to continue exploiting retail traders. In simpler terms, they believe that the Foundation’s inaction is indirectly endorsing this unethical practice.

Ethereum, known for its scalability challenges, currently holds the title as the priciest network for carrying out transactions. Despite ongoing efforts to expand its capacity on-chain, the increasing presence of MEV bots, like those used by Jaredfromsubway, could significantly exacerbate the issue.

Is Solana Doing A Better Job At Addressing MEV Bots?

Based on the current situation, it has been noted by the analyst that Ethereum developers have yet to find a solution for the issue of MEV (Miner Extractable Value), despite their long-term efforts and exploration of potential remedies at different protocol stages.

As a researcher closely following the blockchain landscape, I’ve noticed the recurring issue with Ethereum’s inability to effectively mitigate the impact of MEV (Minimal Extractable Value) bots on gas fees. Despite extensive and coordinated efforts to resolve this persistent problem, progress has been elusive. In contrast, Solana appears to be making significant strides in handling such challenges.

Ethereum Struggling With MEV Bots, Executive Argues That Solana Has Succeeded

As a crypto investor, I’d explain it this way: Solana currently provides substantial support to most of its validators through subsidies. Unlike Ethereum, this financial incentive deters validators from engaging in MEV (Minimum Value Extraction) activities, which can be profitable but disruptive for the network. However, it’s essential to clarify that the subsidy covers only the expenses related to validator voting and not the costs of hardware or operational maintenance.

Despite this method being favored by some, others believe it merely provides “stopgap” solutions. In contrast, they assertively argue that Solana in fact “created” and “utilized” MEV to its fullest extent. Furthermore, there are allegations that certain SOL holders, such as Multicoin Capital, prioritize chains based on their potential for Maximal Extractable Value (MEV) capture.

Lately, certain validators who receive subsidies have been accused of allowing Multi-Value Exchange (MEV) to exploit transactions. The Solana Foundation promptly revoked their staking privileges, but it’s uncertain if such attacks on users will cease.

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2024-06-12 00:11