Opinion by: Da Hongfei, founder of Neo
Decentralized, permissionless and transparent. These are the principles that attracted many of us to the blockchain ecosystem. This vision is still being undermined, however, by an insidious, often invisible force: maximal extractable value (MEV).
MEV isn’t inevitable; it’s a choice. Too many treat it as an unavoidable byproduct of blockchains. It is not. MEV is engineered into incentives, and it can be engineered out. Left unchecked, it becomes a hidden tax, a form of censorship, and a direct assault on fairness and decentralization.
Tolerating it drains user trust and deters adoption. Eliminating it, by contrast, protects users and signals credible, future-proof infrastructure. Building fair systems means building ecosystems that are more competitive and investable.
Builders, developers, users and investors need to recognize this menace and rally to eliminate it; it is both an ethical imperative and a strategic necessity on which the future of Web3 depends.
The censorship hiding in plain sight
Maximal extractable value is the maximum profit a block producer can capture by manipulating transaction order. Some argue there are neutral forms of MEV, like simple decentralized exchange arbitrage, but the vast majority is harmful. This “toxic MEV” is financial censorship that undermines security, permissionlessness and decentralization.
The most common examples are block withholding, time-bandit attacks, front-running and sandwich attacks. Each reorders transactions to extract value at the user’s expense. These are not benign tricks of the trade. They are deliberate manipulations that subvert user intent and drain trust. Allowing them is a policy choice, not a law of nature.
The invisible tax and unwanted centralization
Toxic MEV is a symptom of centralization in systems designed to resist it. No single actor should ever control transaction order. Yet MEV consolidates power among a handful of extractors who exploit outcomes.
The result is an uneven playing field. When users fear they’re being front-run or sandwiched, they lose faith in the system’s integrity. This trust deficit is fatal for long-term adoption. Worse still, MEV distorts incentives. Instead of rewarding builders who strengthen the network, it funnels rewards to those who exploit it. That misalignment is an existential threat to blockchain’s credibility.
For investors, this is more than a technical issue. It is a governance red flag. Chains that choose to tolerate MEV signal fragility. Chains that choose to curb it signal resilience. Solving MEV is not just a moral stance but a competitive advantage.
The massive scale and the deliberate obscurity
The “invisible tax” label is apt. MEV costs are hidden yet real, amounting to billions quietly drained from decentralized finance participants each year.
On Ethereum alone, MEV extraction grew from $78 million in early 2021 to $600 million in 2023. In 2022, at least $133 million was siphoned off. These are conservative estimates. The accurate scale is larger thanks to opaque strategies such as multi-block MEV, offchain hedging and untraceable long-tail attacks. This deliberate obscurity compounds the problem. Normalize MEV, and users may never know how much is taken from them. Accepting that opacity is, again, a choice.
MEV is neither inevitable nor necessary
Some argue that MEV is a necessary evil. That is a weak justification for inaction.
Defenders claim MEV improves liquidity. True arbitrage and market-making can thrive in transparent systems that do not rely on privileged transaction ordering. Efficiency and fairness can coexist, as experiments with encrypted mempools and randomized ordering have already demonstrated.
Others argue MEV incentivizes block producers. But builders already receive block rewards and transaction fees. MEV is excessive and unearned, extracted at the expense of users.
Perhaps the most dangerous myth is inevitability. Solutions already exist. Encrypted transactions, fair-ordering protocols, threshold cryptography and proposer-builder separation experiments show that toxic MEV can be eliminated or at least minimized without harming performance. Choosing not to follow through on these paths is complacency disguised as realism.
An ethical and collective call to action
Beyond technicals, this is a battle for the soul of blockchain. If decentralization is to mean anything, toxic MEV must be confronted head-on.
Layer-1 builders must design protocols that resist MEV from the start. Developers must avoid platforms that depend on exploitation. Users must understand that fairness and ethics are not optional extras but the foundation of decentralized networks. Investors must recognize that supporting chains that choose to solve MEV are both principled and prudent.
A fairer blockchain is not only possible but essential. It will reward those who build and back it and determine whether this technology lives up to its promise of trust and decentralization.
In the end, MEV will not define us — our choices will.
Opinion by: Da Hongfei, founder of Neo.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.