The enemy of your enemy is NOT your friend

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Unbeknownst to the average DeFi user, battlelines are currently being drawn as we speak in the ever evolving realm of MEV (Miner-Extractable Value, or… Maximal-Extractable Value as the cool kids are calling it nowadays).

As the dust slowly settles from when FrankResearcher [first shared on-chain evidence](https://twitter.com/FrankResearcher/status/1311350156219101185) of explicit arbitrage MEV amongst miners last year, several new groups of participants have been scrambling to establish dominance.

In this article I explore (just the surface) of the various groups competing to extend their reach across MEV domains and their respective attributes.


### The Battlelines

The new MEV participants have varying degrees of hashpower support from their own circle of MEV-friendly miners but they are broadly categorized into the following:

**Group 1: Frontrunning / Backrunning Cartels** 

These groups were operating long before MEV became the mainstream threat it is today, even dating back to the pre-Defi frontrunning Bancor days in early 2018. Therefore they already have the established infrastructure to easily evolve into monopolistic and horizontally integrated **MEV Searcher Cartels**. 

In plain English, this means:

- They require very little effort to migrate their existing bots onto MEV infrastructure. Since they already have optimized transaction re-ordering algorithms, they only need to build the on-chain miner-bribe logic (i.e. check frontrun/backrun outcome and only release bribe to miners via block.coinbase if prior TXs were successful, otherwise revert).
- They have the resources to branch out (horizontally integrate) across other bespoke revenue seeking MEV strategies like sandwiching and liquidations. Remember, Sandwiching is essentially a frontrun and a backrun 'sandwiched' on either side of an innocent AMM user's trade, for which these groups are already highly optimized for. MEV-powered liquidations are essentially a rigged backrun (more detail below).
- They have had more time to build working relationships with the larger mining pools. The larger the hashpower at their disposal, the quicker they win the PoW race against other MEV participants on competing ops. EIP1559 will be of annoyance to them since it would 'technically' diminish their competitive hash power advantage, but as [Stephane alluded to here](https://twitter.com/thegostep/status/1369988957770031104), their supporting mining pools do have the option to simply run a modified Geth if the miners are financially incentivized to do so via MEV profits.
- Their sheer size will mean they may be slower to adapt to the emergence of new MEV strategies compared to others.

**Group 2: DAO/Protocol-Based MEV Groups** 

As seen with KeeperDAO's [Rook](https://medium.com/keeperdao/caro-kann-introducing-rook-liquidity-mining-arbitrage-mining-adbe319905fd), 1inch's [dark pools](https://twitter.com/1inchExchange/status/1334992381242961930), the miner-centric [ArcherDAO](https://www.archerdao.io/) and more recently the [YCabal proposal](https://forum.sushiswapclassic.org/t/proposal-ycabal-mev-strategy/3159) for SushiSwap, these groups leverage MEV strategies 'for the good of the DAO/Protocol'.

In plain English, this means:

- They offer their users to opt in and route their transactions through a private relay network (a.k.a. dark pool) straight to mining pools and skip the dreaded mempool (think Samczsun and co's use of Sparkpool's Tai Chi network for that [famous whitehat rescue](https://samczsun.com/escaping-the-dark-forest/) last year).
- However in addition to the private shielding mechanisms, the transactions themselves are analyzed for downstream MEV opportunities such as flow-on arbitrage, liquidation…etc generated as a result of these transactions and the revenue from these MEVs are atomically extracted within the same block and returned back