Key Changes In BNB Smart Chain’s MEV Strategy

Over this past month, BNB Smart Chain (BSC) has implemented certain changes in its MEV strategy to enhance the network's efficiency, security, and user experience. In today’s blog, let’s go through these key changes and understand what they mean for the BSC ecosystem.

What is MEV?

Maximal Extractable Value (MEV) refers to the maximum value that can be extracted from block production in excess of the standard block reward and gas fees. MEV is primarily realized through techniques such as arbitrage and liquidation, where transaction ordering can significantly impact the profitability of trades.

MEV is essential because it incentivizes network participants to actively maintain and secure the blockchain. By allowing miners and validators to profit from ordering transactions, MEV provides financial motivation to continue supporting the network. 

Key Changes in BSC’s MEV Landscape

Certain changes have been proposed recently in BSC’s overall MEV landscape. Let’s review them.

1. Launch of MEV explorer tools: Three new BNB Chain builders have launched their own explorers – Blxrbdn MEV Explorer, Blocksmith MEV Explorer, and Nodereal MEV Explorer. These explorers offer users clear data displays and insights into MEV activities, enhancing transparency and allowing users to make more informed decisions.
2. Enhanced block space market: Proposer-Builder Separation (PBS) on BNB Chain improves scalability and security by dividing block building into two roles: block proposers and block builders. Block proposers handle the proposal of blocks, while block builders, using a unified builder API, manage block construction. This reduces the complexity for validators in connecting with MEV solution providers, streamlining operations, and enhancing network efficiency.
3. Higher MEV block percentage: Currently, up to 70% of blocks on BSC are built by builders and protected by MEV mechanisms, which greatly enhances the overall network security and efficiency.
4. Increased transparency of the MEV landscape: Users and developers can check the MEV Dune Dashboard to view the current landscape of the BNBChain MEV. 
5. MEV validators and builders: The number of integrated MEV validators has increased to 28 (total active validator 45) and the number of MEV builders count has increased to 19. The increase in builders offers more choices for users.

Benefits of the Changes

Here are some of the benefits of the changes discussed above.

#1 Fair Block Space Market

BSC’s block space market has become more fair and transparent. This improvement protects more transactions from sandwich attacks and ensures a more equitable distribution of MEV rewards among searchers, validators, and BNB stakers.

#2 Enhanced Network Security

The BNBChain PBS solution  provides additional economic incentives to validators, strengthening the network's security. Validators receive additional income, motivating them to maintain the network's stability and normal operation.

#3 Market Efficiency and Liquidity

MEV facilitates arbitrage opportunities, aiding in price discovery and market efficiency. Moreover, effective transaction arrangements reduce slippage, ensuring better trade execution and minimizing the difference between expected and actual transaction prices.

Conclusion

BSC’s latest MEV changes and updates provide immediate benefits to validators and users and also pave the way for future innovations. As BSC continues to evolve, it remains committed to fostering a fair and secure environment for all participants.

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