MEV: Engineered Exploitation, Not Blockchain Inevitability

Da Hongfei, founder of Neo, presents a stark characterization of maximal extractable value (MEV) as ‘engineered exploitation masquerading as necessity.’ This perspective challenges the widespread industry acceptance of MEV as an unavoidable feature of blockchain ecosystems. According to Hongfei, MEV functions as a hidden tax on users, extracting value through sophisticated transaction ordering and front-running techniques that ordinary participants cannot detect or prevent.

The problem extends beyond mere financial extraction. Hongfei emphasizes that unchecked MEV enables forms of transaction censorship, where certain transactions can be deliberately excluded or delayed based on profitability calculations rather than network rules. This creates a two-tier system where well-resourced actors can manipulate transaction flows while ordinary users bear the costs. The cumulative effect represents what Hongfei describes as ‘a direct assault on fairness and decentralization’ – the very principles that attracted many to blockchain technology.

Hongfei’s core argument centers on the distinction between MEV as an engineered problem versus an inevitable system feature. ‘MEV isn’t inevitable; it’s a choice,’ he asserts, directly challenging the narrative that maximal extractable value represents an unavoidable byproduct of blockchain architecture. This perspective reframes the conversation from accepting MEV as a natural consequence to recognizing it as a design flaw that can be addressed through deliberate engineering.

The Neo founder contends that MEV is ‘engineered into incentives’ within current blockchain systems, meaning the problem stems from specific design choices rather than fundamental limitations of decentralized technology. This engineering perspective opens the door to potential solutions, as systems designed to enable MEV extraction can be redesigned to prevent it. Hongfei’s position suggests that the blockchain community has accepted MEV as inevitable when, in reality, it represents a failure of system design that requires correction.

This engineering-focused view contrasts sharply with industry narratives that treat MEV as a natural market force within decentralized systems. By characterizing MEV as deliberately built into incentive structures, Hongfei argues for a fundamental rethinking of how blockchain systems are designed and what values they prioritize.

The permissionless, transparent nature of blockchain technology represents what Hongfei identifies as the ‘principles that attracted many of us to the blockchain ecosystem.’ MEV directly undermines these foundational values by creating opaque extraction mechanisms that benefit sophisticated actors at the expense of ordinary users. This creates what Hongfei describes as an ‘insidious, often invisible force’ working against blockchain’s core promise of democratized financial access.

Hongfei positions the fight against MEV as essential for preserving blockchain’s original vision. The ‘hidden tax’ aspect of MEV particularly threatens the accessibility and fairness that make decentralized systems valuable alternatives to traditional financial infrastructure. When users cannot trust that their transactions will be processed fairly and transparently, the entire value proposition of blockchain technology becomes compromised.

The future of blockchain, according to this perspective, depends on eliminating MEV rather than accommodating it. Hongfei’s argument suggests that without addressing this engineered exploitation, blockchain systems risk becoming merely more efficient versions of the extractive financial systems they were meant to replace. The solution lies not in accepting MEV as inevitable but in recognizing it as a solvable engineering challenge that threatens the very soul of decentralized technology.