Unlike Bitcoin, where transactions are ordered on a first-come, first-served basis, Ethereum and Solana rely on a pool of validators to confirm transactions and add them to the next block. This process allows for flexibility as users can expedite transactions by paying a higher fee.
Prioritizing transactions based on gas fees at the protocol level has unintentionally led to the emergence of complex Maximal Extractable Value (MEV) bots in Solana and Ethereum. By leveraging the system, these bots have become a significant factor in the ongoing debate over gas prices.
Will MEV bots increase gas fees on Ethereum?
Now, the debate surrounding validators, gas fees, and the impact of MEV bots on Solana and Ethereum is growing. Mert Mumtaz, co-founder of Solana RPC provider Helius, introduces X. highlighted This is the role of Jaredfromsubway, a single sandwich bot that was the top source of Ethereum gas fees.
This bot alone processes a whopping 142 ETH per day, which surpasses the fees paid by major players like Coinbase.
Since these MEV bots are the highest source of gas fees on Ethereum, the co-founders claim that by not subsidizing validators, the Ethereum Foundation is indirectly supporting MEV bot operators to continue to “rob” retail traders. .
Ethereum, notorious for its scalability issues, is the most expensive network to transact on. While on-chain scaling is a concern, the proliferation of MEV bots could make a massive contribution, as seen by Jaredfromsubway.
Is Solana handling MEV bots better?
In light of this, the analyst notes that Ethereum developers have failed to address the MEV threat despite years of dedicated research and solutions at various protocol levels.
Due to these ongoing issues and the coordinated and extensive research that continues to fail on Ethereum, analysts believe Solana is doing a much better job of handling the impact of MEV bots on gas fees.
Solana currently actively liquidates most validators. Subsidies, which do not exist on Ethereum, deter behavior by penalizing operators who participate in MEV operations. Nonetheless, it is important to note that the subsidies are for voting costs, not hardware and operational costs.
Nevertheless, some believe that this approach provides only a “band-aid” solution. Rather, they claim that Solana actually “invented” and “weaponized” the MEV. There are also other claims that SOL holders like Multicoin Capital prioritize chains based on their MEV capture potential.
Recently, some of these subsidized validators were caught using MEV to “sandwich” users. While the Solana Foundation quickly removed its stake, it remains meet one’s eye Whether MEV attacks will stop.
Featured image from Canva, chart from TradingView