Understand the current situation and future of MEV on a single article

Sui Blockchain's MEV (Maximum Extractable Value) strategy and future prospects

MEV has become a core issue in the blockchain field, and it is related to transaction sorting and arbitrage opportunities. Sui is committed to guiding the development of MEV through Sui Improvement Proposal (SIP) and other mechanisms, ensuring transparency, transaction security, network health, and participant rewards.

In addition to existing mechanisms, Sui plans to introduce more mechanisms to ensure that its core principles can effectively guide the evolution of MEVs on Sui.

Design principles and considerations

Every transaction in Sui contains potential profit opportunities. Sui's MEV ecosystem consists of the following mechanisms:

• MEV transaction submission mechanism
• MEV Opportunity Release Mechanism
• MEV income distribution mechanism
• User transaction protection mechanism

Sui's priority ranking is as follows:

• User transaction protection is more important than MEV extraction value. Prioritize the minimum slippage over the maximum extract value. Avoid introducing off-protocol auctions without exit mechanisms, thereby increasing delays.
• Network transparency is higher than offline transactions with verification nodes or repeaters.
• Promote competition through priority gas auctions (PGAs) and suppress spam behavior that leads to system inefficiency. Ideally, the best strategy for a searcher is to send a transaction whose priority fee is determined by the withdrawal value.
• Encourage allocating rewards to participants who are aligned with the ecosystem: validator nodes, stakers, applications, and users.

Trade Submission

Since transactions that modify the same object are executed in sequence, clients compete to strive for a higher order of execution. From a system perspective, PGA is an effective way to allocate resources that prevents spam while redistributing gas fees among participants.

The key driver of PGA is quantitative execution:

• Tradings sorted by consensus are processed in blocks. Traders compete for priority through gas auctions, both internally and between different submissions.
• This is different from market makers in centralized exchanges (CEXs), where execution priority in CEX depends entirely on speed, and is implemented through low-latency networks and algorithms.
• Higher consensus submission rates reduce the quantitative effect, making decentralized exchanges (DEXs) execution more efficient, but also narrows the window for PGAs.
• At present, non-congested objects PGAs are crucial to the fastest searchers. At a Sui rate of 15 submissions per second, the 70 millisecond submission speed advantage may determine the success or failure of the transaction.
• Congested objects may delay transaction execution, which further amplifies the importance of PGAs, as the window for competing transactions may be 10 times the usual consensus submission.

Two mechanisms can direct transactions to specific Sui submissions:

1. Soft Bundle Transaction Submission (SIP-19):Trades submitted through soft bundles are more likely to be included in the same consensus submission along with the valid bundle. Bundle validity conditions require that the gas price of all transactions is the same. This allows for off-chain auctions of the original transaction and its subsequent transactions, such as services provided by Shio. SIP-19

2. Consensus Amplification Priority Trading (SIP-45): SIP-45 solves the potential jitter problem in consensus submissions, preventing low gas price transactions from being ranked behind high gas price transactions. SIP-45 enhances consensus submissions by amplifying gas prices above k x RGP (k is the system parameter, currently set to 5 and RGP is the reference gas price). Trading with gas price n x RGP will be magnified n times. SIP-45

Select the right deal gas price

The client should consider the following factors to determine the gas price:

1. Preferential gas auction: In the consensus submission, modify transactions of the same object sort by gas price to provide searchers with a fair chance of competition.
2. Consensus Submission Zoom: Gas price transactions over 5 x RGP will be submitted to the consensus through n verification nodes to amplify consensus submission.
3. Avoid congestion delays and cancellations: Sui limits the wall clock time when checkpoint execution is performed by controlling the transaction rate of the same shared object. Transactions that modify congestion objects are sorted by gas price, and low-priced transactions will be delayed and eventually cancelled.

Publish transaction information

Each deal in Sui brings potential profit opportunities. The following figure shows the life cycle of shared object transactions:

Sui provides off-chain auction systems (such as Shio) for submitting soft bundled transactions, as well as a consensus block streaming system under development to enable low-latency user transaction access.

Protect user transactions

User transactions need to be protected from pre-trading, pinched and involuntary submission delays. Sui's external member-driven mechanism and the Mysticeti fast path protocol under development both provide corresponding protection measures. Mysticeti Papers

Sui's MEV evolution

Sui's MEV ecosystem is still developing and more mechanisms will be introduced in the future. Priority gas auctions and consensus amplification define the current system, while innovations such as time lock encryption and Mysticeti fast paths will reshape transaction execution and security.

Disclaimer: This content is for general educational and information purposes only and does not constitute any investment advice.

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