Resources

People often ask me "How did you learn how to hack?" The answer: by reading. This page is a collection of the blog posts and other articles that I have accumulated over the years of my journey. Enjoy!

Maximal Extractable Value (MEV) is the value that can be extracted by manipulating the transaction sequencing. By adding, removing and/or reordering transactions within a block, it's possible to profit from it. This article is a perspective on Solana MEV over the last 4 years.

The first big change in the Solana MEV space was the introduction of the JITO-Solana client. By allowing block-searchers to choose what transactions go into a block in a democratic way with a bidding process, the validators and searchers are able to profit from it. The JITO-Solana client makes up 92% of clients now. In March of 2024, Jito decided to shut this down because it was hurting average users.

Even though JITO is now gone, there are other similar products to it. Much of Solana sandwiching attacks originate from a private mempool called DeezNode. In May of 2024, the scheduler algorithm was made more stable, which prevented leader spamming attacks too.

What type of MEV is profitable? The classic one is arbitrage. You can buy something at $1 and then sell it for $3; you make $2. By changing the cost of things with sandwiching, you can arbitrage users to make large profits. Another form of MEV is performing liquidations on lending protocols.

An insight they show is the amount of reverted transactions on Solana. Since a single user can only hit a MEV opportunity, all others will fail. This bot spam counted for 75% of all non-vote transactions in the network, leading to major issues in throughput. The new scheduler has majorly improved on this problem, though.

Jito attempts to keep track of MEV in the Solana network through their mempool and elsewhere. According to the report, 50% of sandwich attacks come from a program owned by DeezNode. On average, they make 51K transactions in a single day at 2200 SOL per day. Jito shutting down their mempool was nice. However, unless there's a built in way to stop this, some actor will decide to do this.

How do we stop MEV then? A scary way is validator whitelists. Jupiter, a retail trading platform, introduced dynamic slippage to optimize settings in real-time. Another one that is common by AMM's is to route transactions to only go through the Jito block engine without sandwiching.

RFQ (request for quotation) is an off-chain pricing mechanism where market makers bit for prices, with only the final quote being used on chain. JupiterZ and Kamino swap do similar things but follow this underlying principle. Along the same lines are Sandwich-resistant AMMs. No swaps are executed at a price more favorable than the pool's price at the start of a slow window. Because of the long periods of time that prices stay, sandwiching is impossible.

Similar to SR AMMs is Conditional Liquidity, which depends on a new user called "Segmenters" to evaluate the incoming toxicity of the order flow. By adjusting the spreads based on this, we can prevent the profitability of the MEV folks. The spread is paid back as compensation for the Segmenters role. Paladin-Solana aims to be a trusted priority port that can be used but punishes folks who MEV on it.

Overall, a good article that explains the wild world of MEV in the Solana ecosystem. Maybe one day we'll get rid of it.