MetaMask, the leading Ethereum wallet, is launching a new feature called Smart Transactions to combat the negative effects of maximal extractable value (MEV).
MEV refers to the additional profits that blockchain operators can extract from users by manipulating or prioritizing transactions before they are recorded on the network. This practice has been compared to front-running orders in traditional financial markets. MEV drives up prices for users, slows down transaction speeds, and can even lead to transaction failures under specific network conditions.
Consensys' Jason Linehan, director of the Special Mechanisms Group, highlighted the urgency of the issue, stating that approximately $400 million is wasted annually due to transaction rollbacks, stuck transactions, and predatory MEV practices. Linehan emphasized the unanimous agreement within the industry that MEV is a major problem, calling it nonsensical for users to pay for transactions that yield no results.
MetaMask's solution, the virtual mempool, bears similarities to private mempools, which are employed to enhance transaction privacy and protect against MEV. However, Consensys asserts that its virtual mempool is distinct and necessary to address the hidden costs of Ethereum. While private mempool services have raised concerns about centralization, Consensys assures that their virtual mempool is different and does not seek to take over Ethereum. Instead, it aims to eliminate the wasteful expenditure of $400 million each year, recognizing that such inefficiency impedes Ethereum's potential to become the foundation of the global economy.