Solana's MEV (Maximal Extractable Value) landscape operates differently compared to other blockchains. Here’s a streamlined understanding of how MEV functions on Solana.
Note: The MEV landscape on Solana is rapidly evolving. This page will be updated periodically with new developments.
Key Takeaways
- MEV on Solana hasn’t disappeared; it simply manifests differently.
- Not all MEV is harmful—some forms, like liquidations, benefit ecosystem health.
- Profitable front-running exists beyond AMMs, even in DEX liquidity structures.
- Solana’s continuous block production and lack of a protocol mempool alter default chain behavior and social dynamics.
- While forks or copies of Jito’s off-protocol storage pool may emerge, replicating MEV extraction is technically and socially challenging.
- Many validators prioritize Solana’s long-term growth by rejecting sandwich attacks, despite potential revenue loss.
How MEV Works on Solana
Overview
Solana’s MEV differs due to its latency-sensitive design and absence of a traditional mempool. Key distinctions include:
- Continuous Block Production: Reduces front-running opportunities.
- No Protocol Mempool: Transactions are handled off-chain (e.g., via Jito’s bundling system).
- High Incentives for Searchers: Running dedicated nodes or co-locating with high-stake validators is common to capture MEV.
Common MEV Transactions
- NFT Mints: Sudden demand surges during public mints create MEV opportunities.
- Liquidations: Under-collateralized positions are liquidated, rewarding searchers.
- Arbitrage: Exploiting price gaps across markets (chain-native, cross-chain, or CEX/DEX).
- Sandwich Attacks: Now mitigated after Jito’s mempool shutdown (March 2024).
Jito’s Role
Jito facilitates off-chain block-space auctions via bundles—atomic transactions guaranteed for inclusion if searchers pay a minimum tip (10,000 lamports).
👉 Explore Jito’s bundling system
- Bundles: Ensure fast, guaranteed execution or bid for front-running opportunities.
- Mempool Closure: Jito’s pseudo-mempool (enabling sandwich attacks) was discontinued in March 2024.
Supply Chain Dynamics
Solana’s MEV supply chain involves:
- Relayers: Forward transactions (similar to Ethereum’s mempool but off-chain).
- Block Engines: Simulate bundles and run auctions.
- Searchers: Compete to insert MEV transactions via Jito or spam low-fee transactions.
Mitigating MEV
- RFQ Systems: Move price discovery off-chain (e.g., Hashflow).
- MEV-Protected RPCs: Allow users to earn rebates from order flow.
FAQs
Q: Is MEV on Solana profitable?
A: Yes, but it requires infrastructure investment (e.g., co-located nodes) due to Solana’s latency sensitivity.
Q: How do validators earn from MEV?
A: Via tips from searchers—over $7M weekly in March 2024.
Q: Are sandwich attacks still possible?
A: Not since Jito’s mempool shutdown, but other MEV forms (e.g., arbitrage) persist.
Conclusion
Solana’s MEV ecosystem balances opportunity and ethical considerations, with innovations like Jito’s bundles reducing harmful MEV. The chain’s design favors infrastructure-savvy participants but leaves room for equitable solutions.
👉 Learn more about Solana’s MEV future
Thanks to contributors from Overclock, Jito, and Ellipsis for insights.
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