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Dear Bankless Nation 🏴,
Looking back at what web3 has accomplished since 2018, we have a lot to be proud of. DeFi took off like a rocket bringing new entrants, DAOs got their legs, and NFTs have become a household term. But looking into the future of blockchains and web3, there are some clouds. Maximum Extractable Value (MEV) is quickly becoming a problem, and an existential one at that.
Information about prices and markets allows markets to stay liquid, but there is a centralizing effect when the entities that find MEV also finalize transactions. MEV threatens the decentralization of cryptoeconomic protocols, but these are not unsolvable problems.
In this edition of the DeFi Download, we give you the run-down on what MEV looks like in TradFi, the differnet players of the MEV supply chain, and what the future may hold for MEV. We also give you a fun example of an MEV attack and a bit of karma for the harvester. Afterwards, we discuss the burning of tokens and how that burn affects token supply before diving into the economic attack on the Mango protocol.
And as always, we keep you up to date on the latest project releases and opinions on DeFi. Make space in your brain’s hard drive, because this DeFi Download is a fun one!
Contributors: BanklessDAO Writers Guild (Austin Foss, Chameleon, Elemental, Kornekt, oxdog.eth, Teeleroo, Jake and Stake)
From ‘Castle Ethereum,’ by Perchy
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