Exploration of MEV Latencies
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Exploration of MEV Latencies
Front-running is a predatory market behavior that arises due to information asymmetries created by different actors accessing privileged information. Front-running is one of the ways to access MEV, and selling clients' orders is equivalent to the public Ethereum mempool.
Gonzalo Hirsch • Enter the MEV Void: the Rise of Flashbots
Profit-maximizing strategies can be benign (e.g. builders prioritizing transactions that offer fees for being included) or more problematic (e.g. if the builder observes a profitable trade, they can front-run it by including their own copy of the transaction first).
Mark Bissell • Intern Breakdown #2: MEV
MEV trades also benefit the blockchain ecosystem at large by making markets more efficient. For example, arbitrage bots ensure prices are stable across exchanges, and liquidation bots allow collateralized lending applications to function properly.