Over 27 leading Ethereum projects have collaborated to launch MEV Blocker, a solution aimed at minimizing the amount of value extracted from DeFi users. MEV or maximally extractable value, is a tax imposed on users during transactions that MEV bots can hijack midway and inflate prices. This problem has persisted across the Ethereum ecosystem and amounts to a staggering $1.3 billion.
The solution was jointly developed by CoW Swap, Agnostic Relay, and Beaver Build, and is a free and censorship-resistant tool that aims to tackle the issue head-on. In total, 27 Ethereum projects have joined the initiative as launch partners, including Balancer, Gnosis DAO, Shapeshift, and StakeDAO, among others.
Explaining the intention behind launching MEV Blocker, Martin Köppelmann, CEO of Gnosis, stated that users can profit from the backrunning opportunities they create with the launch of MEV Blocker. He emphasized that today, all of that money is taken by the searcher, but with MEV Blocker, it can be split with the people who create the value.
How Does MEV Blocker Work?
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. This gives power back to Ethereum users, ensuring that they have control over their transactions and can profit from them.
The Timing of MEV Blocker
This initiative comes at a time when entrepreneurs are attempting to reduce taxation on users. Despite this, the excitement around the upcoming Shanghai and Capella upgrades resulted in a bull sprint for ETH, with Ether breaching $1,900 for the first time in over seven months on April 5.
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 September 15, 2022. This highlights the complexity of the Ethereum ecosystem and the need for ongoing solutions to address the challenges it faces.
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. The launch of MEV Blocker is a step in the right direction and serves as an example of how collaboration can create solutions that benefit the entire community.
