The Current Status and Future Prospects of MEV on the Sui Network

MEV(, the maximum extractable value, has become a hot topic in the blockchain industry as it involves transaction ordering and arbitrage opportunities. To ensure transparency, protect transactions, maintain network health, and reward participants, the Sui network has been purposefully implementing various improvement proposals and mechanisms to guide the development of MEV.

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In addition to the existing mechanisms, Sui also plans to establish more mechanisms to ensure that its high-level principles guide the evolution of MEV on the network.

Design Principles and Considerations

Every transaction on Sui introduces new information, creating potential profit opportunities. The MEV ecology on Sui is formed through the following mechanisms:

• MEV Transaction Submission Mechanism
• MEV Opportunity Release Mechanism
• MEV Revenue Distribution Mechanism
• User Transaction Protection Mechanism

The overall priorities of Sui are as follows:

• User transaction protection is more important than the quantity of extracted value, prioritizing smaller slippage.
• Network transparency is better than offline transactions with verification nodes or relays.
• Promote competition through priority gas auctions to curb garbage behavior that leads to system inefficiencies.
• Encourage the distribution of rewards to participants aligned with the ecosystem: validator nodes, stakers, applications, and users.

Transaction Submission

Due to the sequential execution of transactions that modify the same object, clients compete to increase their chances of execution order. From a system perspective, priority gas auctions )PGA( are an effective resource allocation method that can prevent spam behavior while redistributing gas fees among participants.

The key driver of PGA is quantitative execution:

• Transactions sorted by consensus are processed in the block, and traders compete for priority through gas auctions.
• This is different from market makers on centralized exchanges, where the execution priority completely depends on speed.
• A higher consensus submission rate reduces the quantitative effect, but also narrows the PGA window.
• Currently, the PGA of non-congested objects is most important to the fastest seekers.
• Congestion objects may delay transaction execution, further amplifying the importance of PGA.

There are two mechanisms to direct transactions to specific upcoming Sui submissions:

1. Submit a batch of transactions through soft bundling )SIP-19(

   • Transactions submitted via soft bundling have a high probability of being included in the same consensus submission.
   • Allow off-chain auctions for original and subsequent transactions

2. Amplify priority transactions through consensus )SIP-45(

   • Resolved potential jitter issues in consensus submission
   • Enhance consensus submission by amplifying the gas price above the reference gas price by a certain multiple.
   • Create a more efficient and fair competition system

Choose the appropriate trading gas price

Clients should consider the following main factors to determine the gas price for submitting transactions:

1. Priority gas auction

   • Sort transactions of the same object by gas price to provide fair competition opportunities for seekers.

2. Consensus Submission Amplification

   • Transactions with gas prices exceeding 5 times the reference price will be submitted to consensus through multiple validation nodes.
   • Any gas price exceeding the amplification threshold will reduce the jitter from inefficient submissions.

3. Avoid congestion delays and cancellations

   • Sui limits the checkpoint execution time by controlling the transaction rate of modifications to the same shared object.
   • Modify the transaction sorting of congested objects by gas price, with lower-priced transactions potentially being delayed or canceled.

Full nodes track the gas prices for executing and canceling transactions. Clients can use this information to determine the necessary gas price, thereby avoiding transaction delays with high probability.

Release Trading Information

Every transaction on Sui introduces potential profit opportunities. The lifecycle of a shared object transaction includes multiple stages: client submission, RPC node broadcasting, validation node submission, transaction execution, effect certificate return, checkpoint generation and broadcasting, state synchronization, and more.

) Information dissemination before submitting a transaction

Sui has an off-chain auction system for submitting soft bundling, following SIP-19. These auctions intercept transaction submissions through an off-chain protocol between the application and the auction system. This information dissemination occurs outside of Sui and is a voluntary choice of the application and the user, providing only speculative information.

consensus block streaming

To achieve low-latency user transaction access, Sui is designing a system for direct streaming of consensus blocks. Full nodes will be able to directly subscribe to consensus blocks and can speculatively notify transactions that are highly likely to be committed. This could significantly reduce the latency of transaction propagation.

Protecting User Transactions

User transactions need to be protected from the impacts of front-running, sandwich attacks, and involuntary submission delays.

External member drive

Sui transaction submission requires external member involvement, usually executed by full nodes. This provides a natural upfront protection, assuming trust in the full nodes responsible for submitting transactions.

Mysticeti Fast Track

Sui is working on a project to change transaction submissions to the fast-path protocol described in the Mysticeti paper. This will significantly enhance system efficiency, but it also provides an opportunity for validating nodes to obtain user transactions through front-running. Currently, this risk exists only at a theoretical level, as there is no evidence of front-running attacks occurring on Sui.

The Evolution of MEV in Sui

The MEV ecosystem of Sui is still taking shape, with new mechanisms set to be launched later this year. Currently, priority gas auctions and consensus amplification define the existing system, while forthcoming innovations such as time-lock encryption and the Mysticeti fast path will reshape transaction execution and security. As these mechanisms come online, the MEV on Sui will continue to evolve, creating a more dynamic and transparent ecosystem.

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