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FairFlow Protocol Explained: MEV Mitigation for Ethereum

Dipankar Sarkar
Dipankar Sarkar · · 2 min read

FairFlow Protocol is my MEV mitigation paper (3 citations, arXiv December 2023). This is the plain-language explanation.

The problem

Maximal Extractable Value (MEV) is the maximum value that can be extracted from block production in excess of the standard block rewards and gas fees. In practice, this means:

  • Front-running: a bot sees your transaction in the mempool, copies it with a higher gas price, and gets their transaction executed first. They buy the asset before you, then sell it to you at a higher price.
  • Sandwich attacks: a bot sees your large swap, places a buy order before you (driving the price up), and a sell order after you (profiting from the price impact of your trade).
  • Back-running: a bot places a transaction immediately after yours to extract value from the state change you created.

MEV is a multi-billion-dollar industry on Ethereum. It is legal but extractive — the value comes from regular users.

The solution

FairFlow Protocol introduces a fair ordering mechanism for transactions. The key ideas:

  1. Commit-reveal: users commit to their transactions (submit a hash) without revealing the content. The ordering is determined by commit time, not by gas price. After ordering is fixed, users reveal the content.

  2. Economic incentives: validators are incentivized to follow the protocol (not reorder for MEV) through a combination of slashing conditions and reward distribution.

  3. Transparent ordering: the transaction order is public and deterministic. No one can front-run because the order is fixed before the content is revealed.

The result: a significant reduction in MEV extraction opportunities without compromising block space efficiency or network throughput.

Why it matters

FairFlow matters for:

  1. DEX builders: fair ordering protects users from sandwich attacks.
  2. Wallet developers: users get the price they see, not a worse price after front-running.
  3. Rollup teams: L2 sequencers can use fair ordering to prevent MEV extraction on their rollup.
  4. The Flashbots community: FairFlow is a research-grade alternative to MEV-Boost that eliminates MEV rather than redistributing it.

The paper

— Dipankar Sarkar, Author of FairFlow Protocol