Good news for the Ethereum merger: This important company will support MEV after the ETH merger

Figment, the blockchain infrastructure company, announced today that it will support Ethereum validators in their quest for VME when the network transitions to proof of stake.

MEV, or “maximum value extractable,” refers to the process by which people who create new ETH can make additional profits by manipulating their control over the network and prioritizing transactions from certain users.

Clayton Menzel, head of protocols and opportunities for the company, wrote that Figment plans to leverage the Ethereum network’s new MEV boost feature to enable ETH validators to participate in MEV. Figment predicts that this will increase user rewards by up to 50%.

ETH is currently created by “mining” using specialized, power-intensive hardware. But after the merger — Ethereum’s long-awaited and often-delayed transition to proof-of-stake — new ETH will be obtained by “validating” or pledging large amounts of pre-existing ETH.

After the merger, Ethereum will require validators to stake a minimum of 32 ETH, or just over $50,000 at the current price, to start receiving rewards.

Figment offers a staking service that pools users’ ETH, earns large returns en masse for validation, and then redistributes the newly earned ETH to users. This allows retail validators to earn rewards while promising much less than the minimum amount.

According to Figment’s announcement, these users will also be able to earn an even higher return on the ETH they have staked.

However, SRM has risks and benefits. Malicious ETH miners have always been able to manipulate the speed and order of transactions on the Ethereum network, using the MEV to take advantage of the ever-fluctuating ETH prices. crypto-currencies.

With the shift to proof-of-stake, Menzel explains, the MEV will become more decentralized, as the roles of validator and block builder will be separated.

At the same time, validators will be able to offer space in the blocks they create to other validators, a mechanism intended to encourage competition and reduce the risk that a validator can control the network enough to manipulate transactions. However, this risk will always be present.

“Criticisms have been leveled at MEV, some of which are well-founded,” Mr. Menzel wrote. He clarified that by making users earn more ETH, they can then reallocate it to staking.

The adoption of the MEV would, according to the company, “increase the security of the network”.

“The MEV is inevitable, but there are ways to democratize access to the value that is extracted,” Menzel said. “The most obvious path to democratization is to share rewards with our delegates. »

Announced by the main developers for years, the merger should finally take place in September. According to the Ethereum Foundation, this transition will reduce network energy consumption by 99%.

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Thomas Estimbre
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