Anonymous researcher accused Ethereum miners of manipulating transactions for arbitrage on DeFi

Anonymous researcher under the pseudonym Frank Topbottom accuses the Ethereum miners of arbitrary inclusion of transactions in blocks for manipulations with transactions in Defi.

Researcher
considers, that with the development of the decentralized finance industry (DeFi) probability manipulating data in the blockchain to make a profit only increases. This can be explained by those, that miners can freely solve, What transactions can they process and in what order. This practice is called "extracting value from mining" (miner extractable value, MEV).

Frank Topbottom noticed a number of suspicious transactions, added by mining bullets Sparkpool and F2Pool. Despite small commissions for conducting these transactions compared to other transactions, They occupied the first places in the blocks. Remarkably, that such transactions were sent from certain addresses.

The researcher also said, that MEV practices are most characteristic of small bullets, such as 2miners, Minerall Pool и EzilPool, which are 2% from the general hashrate of the network. Frank Topbottom gave an example
a dubious transaction with several signs of MEV.

First of all, The commission for its processing turned out to be almost zero - just 2 Wei (1 Gwei equal 1 billion WEI). Wei is the smallest component of the ether. The transaction with such a commission was unlikely to be confirmed, However, in this case, its processing was only 17 seconds. Secondly, The transaction was made with the purpose of arbitration trade. The sender could earn $70 on the deal in $2800. Given the current cost of gas, Such a deal would not bring profit, and arbitration traders would ignore this opportunity. «Culprit» transactions unknown, However, he could not commit it without the assistance of miners.

According to the researcher, Thanks to the possibility of changing transactions at your request, Miners can be ahead of any other Defi users. Miners can abuse their powers, to surpass other traders in arbitration trade, Auctions and proposals of tokens. There are fears, that miners will begin to send their own applications with the zero commission and block legal auction participants. On the other side, This is unlikely, since miners will have to perform agreed actions for a long time.

A more realistic scenario is the competition of miners for highly profitable MEV. In this case, they will have a motivation in short -term axles of the blockchain for the "theft of a trophy" by other miners. This can be poorly affected by ordinary users, If they see, that their transactions are removed from the chain after confirmation.

Frank Topbottom believes, What to prevent miners to extract value from Defi is extremely difficult, After all, their actions do not contradict the rules of consensus. Moreover, these manipulations can perform not only miners, but also stakers in the Ethereum 2.0, if the architect of the blockchain remains the same. The researcher suggested solving this problem using the auction MEV, where the rules of conduct for miners will be indicated and the “sale of rights” will be carried out to change the queue of transactions at will.

Recall, that in September, the miners of the Ethereum earned on the commissions $166 million, This is a record indicator in the history of the existence of Ethereum. The main factor in miners' income was an increase in trade activity in Defi projects.