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- MEV and Sandwich attacks are getting popular in DLTs with block builders taking the leverage at the cost of users.
- With IOTA 2.0, there will be no MEV or front running since no one will be ordering anything and users get to attach their blocks directly.
As the blockchain landscape expands, one of the biggest challenges for builders is ensuring enough security against bad actors. MEV (Maximal extractable value) attacks and sandwich attacks on blockchain platforms have become quite popular in recent times.
The IOTA Foundation is quite aware of these attacks and has employed the right safeguards to protect users of the IOTA network. IOTA’s Research Engineer Jonas Theis recently noted that MEV is one of the biggest challenges for distributed ledger technologies. He notes that it can rig the system completely in the favor of block producers while hampering the users.
Maximal extractable value (MEV) also violates the user’s digital autonomy, he added. Furthermore, on the blockchain networks, events like front running, sandwich, and liquidation are leveraged by block producers to create an economic advantage for themselves. However, this competitive market emerges at the cost of users.
“Not only do users lose opportunities and money, but also the quality of service of blockchains might get compromised,” added Jonas.
IOTA 2.0 will solve the problem
As we know, IOTA is all set to transition to a more robust infrastructure IOTA 2.0 ahead of this year. With IOTA 2.0, there will be no MEV or front running since no one will be ordering anything and users get to attach their blocks directly. In order to decide the inclusions and conflicts, IOTA’s leaderless consensus works on the casually ordered Block DAG dubbed Tangle.
MEV is one of the biggest challenges right now in DLTs. It rigs the system in favor of block producers at the cost of users (in terms of opportunities, money and service quality).
MEV violates users’ digital autonomy and should be impossible at protocol level. How? Here’s a 🧵
— Jonas Theis (@jonastheis_) February 26, 2023
Commenting on the possibility of sandwich attacks, Jonas Theis stated:
Sandwich attacks are another story and are not possible due to the nature of UTXO where a user signs the outcome of any given transaction and can not be tricked into something unintended.
IOTA’s research engineer further added that the impossibility of MEV at the protocol level along with high accessibility and parallel processing will make IOTA 2.0 a great base layer for settlement and liquidity without compromising the digital autonomy of users.
He further added that MEV is impossible in IOTA due to the nature of consensus. To bring any changes to the chain, over two-thirds of the validators have to agree in changing the state in the exact same way. Thus, no single malicious chain is capable of wreaking havoc over the chain.
The IOTA Coordicide
Another much-awaited development in the IOTA ecosystem is the IOTA Coordicide. This will be a crucial step towards making IOTA a totally permissionless and scalable distributed ledger technology. The IOTA Coordicide will replace the Tangle coordinator with a new security mechanism thereby making IOTA fully decentralized.
The launch of the Shimmer network was among the first steps in the introduction of Coordicide.
The #IOTA Foundation is preparing to take its most important step to date in the maturity of the IOTA protocol – realizing the dream of a permissionless and scalable distributed ledger technology. #coordicide #dlt #crypto #cryptocurrency #Solana #Bitcoin pic.twitter.com/Mi00yVtema
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— 🛸IODA ✨ 🚀🌕 🦋 🐙 🐵 🤖🧊 (@IOTA_____) February 26, 2023
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