Hello everyone, I'm Xingchen. MEV, or Miner's (or L2 Sequencer's) Extractable Value, is a complex and highly controversial issue in the Web3 world. It refers to the behavior of sequencers who extract additional profit by reordering, inserting, or censoring transactions. In the EVM ecosystem, MEV is a core pain point for DeFi users because it leads to higher slippage and unfair transaction execution. Hemi, as an EVM-compatible L2, must design effective mechanisms to handle and mitigate the negative impacts of MEV. 1. The Core Conflict Between L2 Sequencers and MEV In L2 Rollups, the right to extract MEV is primarily concentrated in the hands of the transaction sequencer. The sequencer is responsible for determining the order of transactions, thus wielding significant power. Hemi's Risk: Although Hemi's ultimate security relies on its Bitcoin L1 PoP anchoring, at the L2 execution level, its sequencer may still be able to extract MEV. For example, profiting by identifying large DEX transactions and front-running them. Censorship resistance challenge: If the orderer is controlled by whales or centralized entities, they might even censor or delay certain transactions to protect their own MEV interests, directly threatening Hemi's censorship resistance. 2. Hemi's MEV Resistance Strategies Hemi can defend against the negative impacts of MEV from two aspects: technology and economics. Technical approach: Decentralized orderer Hemi must decentralize the power of the orderer. If the orderer is controlled by a single entity, MEV will be centrally extracted. Hemi should adopt a rotating or competitive orderer mechanism, allowing decentralized nodes worldwide to participate in transaction ordering. This makes MEV extraction more difficult and decentralized. Technical approach: Batch Auction Hemi could consider adopting a batch auction mechanism. Under this mechanism, transactions are not executed in real time, but are collected within a time window (e.g., every 100 milliseconds) and then executed in a fair order, or settled at a uniform price. This effectively eliminates the possibility of front-running, as all transactions are processed simultaneously. 3. Community Distribution of MEV Value Instead of attempting to completely eliminate MEV (which is technically nearly impossible), it's better to capture it and give it back to the community, achieving the "democratization" of MEV. MEV Revenue Transparency: Hemi's sorter must make the MEV value it extracts transparent and submit a portion (or all) of its revenue to Hemi's DAO treasury. Giving Back to Users: The DAO treasury can use this MEV revenue for two key operations: Gas Fee Subsidy: Using MEV revenue to subsidize users' transaction gas fees, especially L1 pegging fees, enhances Hemi's cost competitiveness. HEMI Burning: Converting MEV revenue into HEMI tokens and burning them further enhances the token's deflationary pressure. 4. Hemi's Unique Advantage: Enhanced Security Hemi's PoP mechanism ensures that even if MEVs occur, the ultimate security of L2 will not be threatened. The Ultimate Constraint on L1: Regardless of how the orderer extracts MEVs on L2, Hemi's L2 state ultimately needs to be anchored to Bitcoin L1 via the PoP mechanism. The immutability of Bitcoin L1 and the malicious tampering of the L2 state form the ultimate economic constraint. Hemi must find a balance between efficiency and fairness. Through a decentralized orderer and a transparent MEV revenue distribution mechanism, Hemi can minimize the negative impact of MEVs on ordinary users and transform them into positive value for the community and the HEMI token. (Disclaimer: The above content represents personal opinions only and does not constitute any investment advice. The market is risky; invest with caution.) @Hemi #Hemi $HEMI

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