Over 27 prominent Ethereum projects have come together to launch MEV Blocker, a solution that aims to tackle and minimize the amount of value extracted from their users. MEV, or maximally extractable value, is a tax imposed on decentralized finance (DeFi) users on transactions. MEV bots can hijack transactions midway, such as Ether (ETH) trades, nonfungible token (NFT) purchases, and ENS registrations, and inflate prices for the users.
MEV Blocker was jointly developed by CoW Swap, Agnostic Relay, and Beaver Build as a free and censorship-resistant tool to counter this “$1.3 billion dollar problem” persistent across the Ethereum ecosystem. In total, 27 Ethereum projects joined the initiative as launch partners, including Balancer, Gnosis DAO, Shapeshift, and StakeDAO, to name a few.
Explaining the intention behind launching MEV Blocker, Martin Köppelmann, CEO of Gnosis stated: “With the launch of MEV Blocker, users can profit from the backrunning opportunities they create. Today all of that money is taken by the searcher, but why shouldn’t it be split with the people who create the value?”
MEV Blocker can be added as a custom RPC endpoint to a crypto wallet, which, in turn, can protect users from frontrunning and sandwiching when using any Ethereum DApp. According to the official announcement, MEV Blocker sends at least 90% of the profits from winning bids back to users and 10% to validators as a reward — thus giving “power back to Ethereum users.”
This initiative comes at a time when entrepreneurs are attempting to reduce the taxation on users. Despite this, the excitement around the upcoming Shanghai and Capella upgrades resulted in a bull sprint for ETH. On April 5, Ether breached $1,900 for the first time in over seven months.
While MEV Blocker is a step towards mitigating the impact of MEV on DeFi users, it is important to note that the price of ETH dropped sharply following the execution of the Merge on Sept. 15, 2022. This highlights the complexity of the Ethereum ecosystem and the need for ongoing solutions to address the challenges it faces.
In conclusion, the launch of MEV Blocker by 27 Ethereum projects is a welcome development for DeFi users. It has the potential to significantly reduce the impact of MEV and give power back to Ethereum users. However, it is important to continue developing solutions that address the complexities of the Ethereum ecosystem and ensure its continued growth and success.