Discovering MEV and PBS
As you saw in the latest Ethereum roadmap, the scourge phase plans to implement PBS and address the systematic risks of MEV.
We will start by providing an overview of MEV before discussing how to implement MEV in Ethereum and PBS.
Overview of MEV
In a distributed system like blockchain, without a centralized entity managing the order or transaction flow, arbitrage opportunities always exist. Earlier in this chapter, we talked about the CAP theorem. With the existence of network partition, a distributed system has to decide whether to prioritize consistency or availability. This applies to decentralized networks too. Due to the decentralized nature of blockchain, data may not be consistent, although it is considered consistent eventually. Certain data may not be available until the transaction is considered final. Both perspectives create the opportunity for arbitrage and exploitation of the value.
You may recall from Chapter 1, Blockchain and Cryptocurrency...