Cryptocurrency miners have great latitude in deciding which transactions they
accept, including their own, and the order in which they accept them. Ethereum
miners in particular use this flexibility to collect MEV-Miner Extractable
Value-by structuring transactions to extract additional revenue. Ethereum also
contains numerous bots that attempt to obtain MEV based on
public-but-not-yet-confirmed transactions. Private relays shelter operations
from these selfsame bots by directly submitting transactions to mining pools.
In this work, we develop an algorithm to detect MEV exploitation present in
previously mined blocks. We use our implementation of the detector to analyze
MEV usage and profit redistribution, finding that miners make the lion’s share
of the profits, rather than independent users of the private relays. More
specifically, (i) 73% of private transactions hide trading activity or
re-distribute miner rewards, and 87.6% of MEV collection is accomplished with
privately submitted transactions, (ii) our algorithm finds more than $6M worth
of MEV profit in a period of 12 days, two thirds of which go directly to
miners, and (iii) MEV represents 9.2% of miners’ profit from transaction fees.
Furthermore, in those 12 days, we also identify four blocks that contain
enough MEV profits to make time-bandit forking attacks economically viable for
large miners, undermining the security and stability of Ethereum as a whole.