Following Sunday’s exploit of the decentralized exchange Curve Finance, Ethereum validators have seen a dramatic increase in profits from Maximal Extractible Value (MEV). This extra profit comes from the reordering or inserting of transactions within a data block, and is sometimes compared to arbitrage or front-running in traditional markets, according to Ethereum core developer Eric Conner.
The hack of Curve drained over $50 million from key liquidity pools, leading to a frenzy of transactions and a total of 6,006.23 ETH (or roughly $11 million) in MEV rewards on July 30. This was the most ever, according to researchers who track these profits.
Toni Wahrstätter, an Ethereum researcher who created a leading MEV-Boost dashboard, told journalists that the value directed to validators and proposers has reached levels last seen during the USDC depegging event in March. Profits from transaction fees and MEV have even surpassed those recorded during the FTX collapse, which had a widespread effect on the markets.
According to Wahrstätter’s dashboard, yesterday’s exploit saw the highest day for just MEV rewards. However, during the depeg of USDC on March 11, transaction fees were higher, which contributed to larger MEV opportunities.
But yeah, when USDC depegged, the whole effect was even more pronounced, Wahrstätter said.
The exploit of Curve Finance has resulted in a massive reallocation of money in the Ethereum blockchain ecosystem, leading to increased profits for crypto middlemen. This is due to the surge in Maximal Extractible Value (MEV) rewards, which are a key component of trading revenue on Ethereum.
Ethereum validators have seen the highest MEV rewards ever, surpassing those recorded during the USDC depegging event in March and the FTX collapse. According to Ethereum researcher Toni Wahrstätter, the value directed to validators and proposers has reached levels last seen during the USDC depegging event in March.