SoK: Cross-Domain MEV

08/08/2023

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by   Conor McMenamin, et al.

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We examine the current state of the cross-domain world, with particular focus on the protocols being used/planned for use by multi-domain users. We build on existing frameworks for analyzing how MEV is extracted, while also adding a new categorization of intrinsic-extractable value vs. time-extractable value to describe how MEV is generated for an extractor. Together, this provides us with a framework with which we compare classes of protocols enabling cross-domain MEV, and the MEV occurring within these classes. We analyze each protocol class separately and compare current implementations to an ideal functionality for each. We primarily focus on analyzing the MEV mitigations that these protocols provide, both now, and into the future. In each case, we also outline the technical barriers that current protocol implementations face. With this methodology, we identify sequencers and order-flow auctions as cross-domain protocols with the greatest potential to mitigate MEV, but also as protocols with some of the biggest technical barriers.