Ethereum miners accused of manipulating block content for abuse in DeFi
Ethereum miners use the tools they have to organize transactions in blocks to their advantage and to obtain the so-called “miner extractable value” (MEV). An analyst at Frank Topbottom drew attention to this.
MEV has long been viewed as a theoretical method for manipulating data on the blockchain, but with the rise of the decentralized finance space, the threat becomes real..
The analyst noticed a suspicious arrangement of transactions in blocks added by pools such as SparkPool and F2Pool. More than once, the first places in them were received by transactions sent from certain addresses, which, other things being equal, would not have such a priority, since they used lower commissions. He also notes that smaller pools such as 2Miners, Minerall Pool and EzilPool were more often seen in such practices, which account for about 2% of the total hashrate..
In one of the cases, the analyst discovered several signs at once that the specified transaction was not added to the block by accident. The processing fee turned out to be insignificant and amounted to only 2 wei (1 Gwei = 1 billion wei). Under normal circumstances, such a transaction would hardly ever be added to the network. In this case, it took 17 seconds..
The transaction was aimed at using an arbitrage opportunity to earn $ 70 on a $ 2,800 trade. The rest of the users ignored this opportunity, considering it impractical, but the likely intervention of the miner made it possible to effectively use it and reduce the spread in the market.
In other cases, the intervention of miners may not be so favorable, as they can get ahead of any other user who sends a profitable deal to the cryptocurrency mempool. The analyst admits that in the future miners will compete for such transactions with each other and may even carry out reorganizations.
It is noteworthy that the problem will not be solved in Ethereum 2.0 as well, since the stakers will be able to perform the same manipulations. Possible ways to change the current system for including transactions in blocks are still being discussed by the developers and are unlikely to be implemented in the near future.
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