Bitrabo Editorial
Bitcoin and Solana differ from Ethereum in how transactions are processed, utilizing a pool of validators to confirm and add transactions. This system enables users to speed up transactions by paying higher fees.
Ethereum and Solana’s transaction prioritization based on gas fees has inadvertently given rise to complex Maximal Extractable Value (MEV) bots. These bots have become a significant factor in the ongoing debate about gas fees.
The Impact of MEV Bots on Ethereum Gas Fees
The debate on validators, gas fees, and MEV bots on Solana and Ethereum is intensifying. Mert Mumtaz, the co-founder of Solana RPC provider Helius, highlighted the role of a top gas fee source on Ethereum, the “Jaredfromsubway” sandwich bot.
This single bot alone racks up 142 ETH per day in gas fees, surpassing fees paid by prominent players like Coinbase. The co-founder argues that by not subsidizing validators, the Ethereum Foundation indirectly supports MEV bot operators, harming retail traders.
Ethereum’s scalability issues and the proliferation of MEV bots, exemplified by Jaredfromsubway, contribute to its reputation as the most expensive network for transactions despite ongoing on-chain scaling efforts.
Solana’s Approach to MEV Bots
The analyst notes that Ethereum developers have not effectively tackled the MEV issue despite years of research. Contrary to Ethereum, Solana is perceived as better handling MEV bots’ impact on gas fees.
Solana actively subsidizes most validators, penalizing operators involved in MEV activities. This approach aims to discourage such behavior, although the subsidy covers voting costs, not hardware and operational expenses.
However, critics argue that Solana’s method offers temporary solutions and may inadvertently incentivize MEV activity. Some claim that SOL holders prioritize chains based on their MEV capture potential.
There have been instances where subsidized Solana validators were caught facilitating MEV manipulation, prompting swift action from the Solana Foundation. The effectiveness of these measures in curbing MEV attacks remains to be seen.