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Comment by latchkey | Hacker News Reader

The other "fun" thing that people are getting into now is front running transactions in the mempool. This is giving rise to a poorly named term, MEV (miner extractable value). The concept of doing arb on that is fascinating and we will start to see projects offering private mempools to prevent this, more and more in 2021.

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KeeperDAO [1] is one project that's aiming to tackle this. Their whitepaper is here [2].

[1] https://keeperdao.com/

[2] https://github.com/keeperdao/whitepaper/blob/main/whitepaper...

This is security through obscurity and more similar to the blind auction mechanism that the MEV-geth team is working on.

This does not prevent a large miner from watching the mempool and picking the right transaction order that they want.

It also will only protect the very small number of people who are using keeperdao. It is a very nice try, but I don't think it'll go very far.

That won't really be necessary once EIP-1559 is released which is expected in Q2/Q3 of this year.

Sorry, 1559 won't solve this problem.

Doesn't it set the network fee?

No: MEV is often far greater than the network fee. A miner now having to pay $13 to make $2000 isn’t going to be deterred by having to pay $13.

Assuming we have a miner intelligent enough to detect all arbitrage transactions. What prevents the miner from paying $2000 for the transaction? I'm asking because that would mean "MEV" would always be 100% of the arbitrage opportunity.

Miners don't have to pay anything other than capex/opex for transactions. If they can mine their own transactions. Most cannot.

Also remember, the cost of ETH to a large miner is significantly lower than market price (hence mining instead of buying).

It sets a base fee. It does not prevent a miner from forming their own blocks with whatever transactions they want and in whatever order they want.

Disclosure: very large scale miner working on this exact problem space

Would staking resolve that?

Front-running has nothing to with gas fees

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