An anonymous researcher under the pseudonym Frank Topbottom accuses Etherium miners of arbitrarily including transactions into DeFi transaction manipulation blocks.
The researcher believes that with the development of the Decentralized Finance (DeFi) industry, the probability of manipulating data in the block for profit only increases. This can be explained by the fact that the miners are free to decide which transactions they can process and in what order. This practice is called "miner extractable value" (MEV).
Frank Topbottom noticed some suspicious transactions added by SparkPool and F2Pool mining pools. Despite the small fees for these transactions compared to other transactions, they ranked first in the blocks. It is noteworthy that such transactions were sent from certain addresses.
The researcher also reported that MEV practices are most common in small pools such as 2Miners, Minerall Pool and EzilPool, which account for about 2% of the total hash rate of the network. Frank Topbottom gave an example of a questionable transaction with several features of MEV.
First, the commission for its processing was almost zero - only 2 Wei (1 Gwei equals 1 billion Wei). Wei - the smallest component of the air. A transaction with such a commission is unlikely to be confirmed, but in this case its processing was only 17 seconds. Secondly, the transaction was made for the purpose of arbitration trading. The sender could earn $70 on a $2800 transaction. Given the current cost of gas, such a transaction would not have yielded any profit, and the arbitrage traders would have ignored this possibility. The "culprit" of the transaction is unknown, but he could not have made it without the assistance of the miners.
According to the researcher, due to the ability to change the order of transactions at will, the maintainers can be ahead of any other DeFi user. Miners can abuse their power to outperform other traders in arbitrage trading, auctions and token offers. It is feared that the maintainers will start sending their own zero commission bids and block legitimate bidders. This, on the other hand, is unlikely, as the maintainers will have to perform concerted actions over a long period of time.
A more realistic scenario is the competition of the miners for a highly profitable MEV. In this case, they will have the motivation in the short-term forks of the Blockchain to "steal the trophy" from other miners. This can have a bad effect on ordinary users if they see that their transactions are removed from the chain after confirmation.
Frank Topbottom believes it's extremely difficult to prevent the maintainers from extracting value from DeFi because their actions do not contradict consensus rules. And these manipulations can be performed not only by the miners, but also by the stickers in the Etherium 2.0, if the blockchain architecture remains the same. The researcher proposed to solve this problem with the help of MEV auction, which will specify the rules of behavior for the maintainers and will "sell the rights" to change the queue of transactions at will.
It should be reminded that in September the Etherium's miners earned $166 million on commissions, which is a record figure for the entire history of the Etherium. The main factor of revenue growth of the meiners was an increase in trading activity in DeFi projects.
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