https://arxiv.org/pdf/1904.05234.pdf
Quotes
We show that MEV creates systemic consensus-layer vulnerabilities
Our results are surprising for two key reasons. First, they identify a concrete difference between the consensus-layer security model required for blockchain protocols securing simple payments and those securing smart contracts. In a payment system such asBitcoin, all independent transactions in a block can be seen as executing atomically, making ordering generally unprofitable to manipulate.
Smart contract security is often studied purely at the application layer, abstracting away low-level details like miner selection and P2P relayers’ behavior in order to make analysis tractable
Low-level protocol behaviors pose funda- mental challenges to developing robust smart contracts that protect users against exploitation by profit-maximizing miners and P2P relayers that may game contracts to subsidize attacks
Because pure revenue opportunities offer unconditional revenue, arbitrage bots often compete against each other by bidding up transaction fees (gas) in what we call PGAs. We formally model bot PGA behavior and observe a cooperative equilibrium. We show that empirical measurements of the evolution of bot PGA strategies validate key features of our model.