MEV minimization using randomness

Economics
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4

I propose the following alternative, which would make MEV very hard for block proposers:

  • Block proposers can pick which transactions to include or not to include in advance. The hash of all these transactions is computed. Let these be the initial orders for those transactions.
  • A block is only valid if the following is true:
    • The transaction with a median order (treated as binary numbers) is the next transaction included in a block. The median can be efficiently found in O(n) time with a selection algorithm.
    • The orders of the remaining transactions are XOR’d with the above hash.
    • Rinse and repeat.

The above is O(n^2) to compute, but a lot more complicated to front run/MEV extract since a transaction needs to be generated so that it and the next transaction are medians. This is computationally infeasible.

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