Master's Thesis Danut Ilisei

Abstract

The past years have seen a significant increase in the speed of research and development of blockchain technologies. Beyond the pioneering Bitcoin, many other distributed ledger technologies (DLT) platforms have evolved and proved their utility and security. These platforms can now support a wide range of applications such as gaming, decentralized finance, governance, supply chain, etc. This resulted in having multiple blockchains that have both different states and consensus algorithms. Along this progress, Maximal Extractable Value, widely known as MEV, has emerged as an inevitable aspect of blockchain ecosystems. MEV has been extensively studied within the constraints of a single blockchain. However, the same cannot be said of its advancement in a multi-chain environment, where the possibilities are relatively unexplored. Cross-chain transactions enable the transfer of assets and data, across different blockchain networks. These transactions are facilitated through bridges, and infrastructure components that introduce another degree of complexity to the dynamics of MEV that is yet to be explored. The growing number of cross-chain transactions emphasizes the importance of studying the role of bridges when it comes to extracting value while sending messages across blockchains. Therefore, MEV is becoming a more and more important factor for users of blockchain protocols, and therefore for bridge users as well. The success of bridges today also relies on their ability to efficiently manage MEV and safeguard their users from negative side effects.

Research Questions