MEV Bots Impacting Ethereum and Solana Transaction Fees
In the world of cryptocurrency, Ethereum and Solana have taken different approaches to transaction validation, with both networks facing challenges from Maximal Extractable Value (MEV) bots. Unlike Bitcoin’s system of first-come, first-served transactions, Ethereum and Solana rely on validators to confirm transactions, allowing users to prioritize transactions by paying higher fees. However, this system has also given rise to MEV bots, causing significant issues for both networks.
MEV bots have become a hot topic in the ongoing discussion about transaction fees on Ethereum and Solana. Mert Mumtaz, co-founder of Solana RPC provider Helius, brought attention to the impact of the “Jaredfromsubway” bot on Ethereum. This particular bot alone racks up an astonishing 142 ETH in daily gas fees, surpassing even major players like Coinbase. Mumtaz argues that by not providing subsidies to validators, the Ethereum Foundation indirectly supports MEV bot operators who exploit retail traders.
Ethereum, known for its scalability challenges, remains the most costly network for transactions due to the proliferation of MEV bots like Jaredfromsubway. Despite efforts to address the issue, Ethereum developers have yet to find a solution to the MEV problem.
On the other hand, Solana takes a different approach by actively subsidizing most of its validators, a strategy not seen in Ethereum. This subsidy, targeted at voting costs, aims to discourage MEV operations by penalizing operators involved in such activities. However, critics argue that this approach may only provide temporary solutions, with some even suggesting that Solana has “invented” and “weaponized” MEV.
Despite the efforts to combat MEV attacks, subsidized validators in Solana have been caught enabling MEV to “sandwich” users. The Solana Foundation has taken swift action by removing their stake, but it remains to be seen if MEV attacks will cease.
Ryan Berckmans, an Ethereum developer, acknowledges that despite extensive research on MEV, Ethereum continues to struggle with the issue. He questions the effectiveness of Solana’s subsidies, suggesting that they may lead to unintended consequences.
In conclusion, both Ethereum and Solana are grappling with the challenges posed by MEV bots. While Ethereum’s lack of validator subsidies contributes to high gas fees, Solana’s approach offers a potential temporary solution to the problem.