Navigating the Dark Forest: Unraveling the Mysteries of the MEV Market Landscape
MEV Market Map
MEV Market Map

**Introducing the MEV Market Landscape

After spending weeks researching the MEV space, we are excited to share our market map: the "Dark Forest" of the MEV Market Landscape. We researched approximately 100 MEV-related projects and organized into three overarching categories: MEV Infrastructure, MEV Solutions, and MEV Applications. Each category is further divided into specialized subcategories in each section.

It is important to acknowledge that the MEV market is a complex and an ever-evolving domain. As such, the categorizations presented here may evolve over time. Different projects could be categorized in different categories, and we view this landscape as just one perspective. We welcome feedback as well as collaboration to update it. Now, let's delve into the MEV stack starting from the foundational Infrastructure Layer.

I. Infrastructure Layer

Our exploration of the MEV Landscape begins at the bottom with the Infrastructure Layer, which is anchored by “Validators and Staking” participants. As anticipated in our earlier research, MEV 2.0: The Rise of MPSVs, the emergence of MPSVs (MEV Profit Sharing Validators) has transformed the market, with many validators now offering enhanced MEV rewards alongside traditional staking yields. We have observed the rise of MPSVs & LSDs across different chains offering MEV rewards. Some notable validators providing MEV rewards to stakers are Cogent, Chainflow, Chorus One, Stakefish. Similarly, on the LSD side of things many of these protocols are socializing MEV rewards across stakers i.e. Manifold, Frax, Rocketpool,  Laine (StakeWiz), Marinade Finance, and Lido. These market players supply MEV rewards in addition to the returns derived from pure staking. 

On top of this subcategory, we find the core Block Builders and Relay participants. Block builders are highly specialized actors who construct blocks from transaction orderflow (public transactions, bundles, private transactions, etc.). Relays accept blocks from builders, and pick the one with highest profit for the current proposer

Within the Block Builder category, we have special players like Skip Protocol (Cosmos) which provides sovereign MEV infrastructure. By sovereign, we mean that Skip is creating modular tools that allow app-chains to fully control and customize rules around transaction preferences. We also have Jito - that serves as an MPSV (MEV Profit Sharing Validator) with its own liquid staking derivative, jSOL.

Each blockchain ecosystem typically has its own MEV Block Builder provider (or multiple providers in Ethereum’s case) – some examples include: Skip / Cosmos, Jito / Solana, Flashbots / Ethereum, Fastlane / Polygon. Two key observations emerge from this analysis:

  1. We anticipate that existing (or new) blockchain ecosystems will each continue to develop their unique Block Builder providers. Category leaders will likely emerge on each chain, within increasing economies (benefits) of scale.

  2. There is an obvious demand for Cross-Chain MEV solutions, which should lead to collaboration with existing Block Builders to address this need.**

II. MEV Solutions

MEV Solutions encompass an array of tools and protocols designed to help extract, prevent, or democratize MEV across the ecosystem. Among the most compelling subcategories in this section is MEV Cross-Chain Coordination, spearheaded by leaders like Skip Protocol, Suave, and Anoma. The increasing prevalence of bridging, composability, and modularity naturally paves the way for novel cross-chain and inter-chain MEV solutions.

Another interesting subcategory is the (shared) Sequencer segment, which focuses on Layer-2 scaling solutions. 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.

Additional emerging areas include NFT-Related MEV solutions, such as Pikapool, which serves as a pioneering example of a platform that "does for NFT minting what CowSwap did for DEX trading." In other words, Pikapool aims to create an NFT specific mempool and reduce any negative externalities of MEV. Other NFT-focused tools involve sniping and rarity instruments that arbitrageurs (arbs) can leverage to maximize profits and trade NFT floors.

The Orderflow Auctions section refers to designs that aim to return users the value they create via their order. This section showcases implementations proposed by Stephane Gosselin and Ankit Chiplunkar.

Lastly, a new category we believe will start to develop will be the Gaming MEV tooling market. Blockchain Gaming is interesting because it often involves Defi (i.e. game tokens) as well as NFTs (i.e. in-game assets). As we see more and more innovation in the gaming space and the growth of the crypto gaming industry, we believe this will be ripe for MEV disruption. We saw MEV enter Defi, then NFTs, and given a big part of on-chain gaming is NFTs - it’s only natural that MEV will play a crucial role here, especially with regards to user experience. Either existing MEV players will capture this market, or we may see some new players emerge.

An early example of some long-tail gaming MEV was mgnr developing a free market to sell locked $JEWEL tokens from Defi Kingdoms - which opened the door for all kinds of arb opportunities on illiquid game tokens. **

III. MEV Application Layer

The Application Layer includes end-user products that span the MEV ecosystem. On one end of the spectrum, numerous DEXs and Aggregators emphasize MEV prevention. Conversely, other marketplaces and trading platforms frequently encounter MEV arbitrage and liquidations. Although not exhaustive, our list serves as an illustration of how MEV (indirectly or directly) permeates the Application Layer.

One interesting category we are also starting to see are niche specific marketplaces with regards to blockspace and payment-for-order-flow. Examples of this include Alkimiya as well as DFLOW. Will be interesting to see how these marketplaces are leveraged and what new use cases emerge from them.

We predict the emergence of two significant categories within this layer: 

  1. NFT & Gaming marketplaces that offer MEV protection. Instances of NFT MEV include botting activity during minting events, arbitrage opportunities involving floor prices, or liquidations on NFT loans. By prevention, we refer specifically to mitigating botting activities. As mentioned earlier, the increasing prevalence of on-chain gaming will likely introduce various forms of MEV to this space. Consequently, gaming platforms must adapt their protocols to address these challenges. **

  2. MEV Wallets. Wallets are the gateway between Users and decentralized Applications and we expect Wallets to start partnering with MEV solution providers or block builders to help users recapture any MEV slippage they may encounter or even new forms of MEV.**

In conclusion, the MEV Market Landscape offers a comprehensive overview of the intricate and dynamic world of MEV. As the market continues to evolve, we remain committed to refining and updating this resource in collaboration with the broader community. Together, we can navigate the "Dark Forest" of MEV and illuminate the path towards a more transparent, secure, and equitable blockchain ecosystem.



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