Some believe that it puts the integrity of crypto at risk and that eliminating MEV would revolutionize DeFi this is precisely what the Assembly network delivers. Essentially, this is a form of market manipulation, which is considered illegal and unethical behavior in traditional stock markets but is rather common in crypto markets. The mempool provides attackers with privileged knowledge about imminent transactions which only bots can take advantage of due to the high-speed processing required. This attack is possible because miners/validators order transactions via an auction system with the highest gas fees being processed first the attacker can place their transactions in an order to maximize their returns. Every day millions are taken from right under the noses of users in this manner, often without being noticed or noticed only when it's too late. This increases the price of the token buy for the victim and returns immediate profit for the bot, earning profit in the same block with zero risk. For example, when a transaction is placed on a DEX to buy a large amount of a certain token, or a high slippage transaction is placed into the mempool, a bot can place a buy order just before the transaction and a sell order right after it. In MEV, bots crawl through mempools (the places where buy/sell transactions are kept in waiting before being processed and where all details of a transaction can be seen by anyone) looking for the juiciest transactions to essentially hijack during the mining process for personal gain. One such strategy is MEV, which stands for ‘Miner Extractable Value’ or, increasingly, ‘Maximal Extractable Value’. The Assembly network provides a strong solution to the infamous MEV problem.Īs the world of decentralized finance (DeFi) grows, so do opportunities for those seeking to take advantage of the system through a variety of controversial strategies.
Assembly holds the key to eliminating MEV by running consensus not on the finalized block but on the batch of transactions, thereby eliminating the auction ordering mechanism. Its roots lie in the nature of the blockchain consensus: the ability of miners/validators/bots to insert their own transactions into the block and order the transactions within the block for their benefit. MEV is the decentralized finance equivalent of market manipulation but on a scale not achievable in traditional finance.
How Assembly Eliminates the Market Manipulation Practice of MEV in DeFi
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