Staking platform Marinade floats proposal to tackle malicious validators and democratize MEV on Solana

Marinade, one of the largest staking platforms on Solana, is discussing a new governance proposal to tackle malicious validators and address the current issue surrounding maximum extractable value (MEV) on the network.

MEV refers to the profits that can be generated by rearranging the transaction order on a blockchain, which, while potentially optimizing network efficiency, can also lead to negative practices like front-running and sandwich attacks if left unchecked.

The proposal stated that MEV can be both a challenge and an opportunity, as it can help enhance network efficiency by optimizing liquidity and rewarding validators. “On the other hand, unchecked MEV can result in negative user experiences, such as front-running, sandwich attacks, and centralized control, which undermines decentralization.”

According to Marinade, democratizing MEV would involve creating systems and practices that ensure a more equitable distribution of the opportunities and rewards that MEV presents. The goal will be to prevent a concentration of power among a few participants and ensure that a broader set of stakeholders can benefit from the activities related to transaction ordering.

MEV exists on chains like Solana and Ethereum, although its manifestation and impact differ due to the underlying architectural distinctions of the two blockchains.

Marinade said it has seen more challenges after MEV protocol Jito Labs closed their public mempool this year, which led to the rise of private mempools controlled by a few entities.

Sandwiching

In an X post on Tuesday, Ben Coverston, a Solana-focused research firm Temporal researcher, specifically raised concerns about so-called sandwich attacks on Solana targeting MEV.

In a sandwich attack, an attacker "sandwiches" a victim's transaction by placing their own transactions before and after it. This allows the attacker to manipulate the price of the asset being traded and profit at the victim's expense.

“Millions of dollars in MEV are siphoned away DAILY by vpe (aka arsc), the top sandwich bot,” Coverston wrote. “But the worst part? This isn’t just about MEV—it’s about centralization of MEV. And it’s the greatest threat to Solana’s decentralization I’ve seen.”

The Temporal researcher claimed that the sandwich bot could potentially become Solana’s largest staker within one or two years. "If the current centralization trend continues, I predict arsc will become Solana’s largest staker within 1-2 years. They’re looping profits into staking their sandwiching validators—already top 200 by stake weight—and they’re not slowing down," Coverston wrote.

Balanced approach to MEV

To tackle the problem of sandwiching and other side effects from MEV, Marinade's proposal suggested a “balanced” approach that focuses on reducing harmful MEV while redistributing it as fairly as possible via an open market.

“At Marinade Labs, we recognize that while MEV cannot be eliminated, its impact can be managed, and its value can be distributed fairly,” the proposal said.

The staking platform proposed establishing a public committee for delegation oversight and identifying and blacklisting malicious validators.

It also suggested reopening the public mempool to democratize access to MEV and ideally stop the centralization of deal flows into a few private mempools. Reopening the public mempool was also suggested by Temporal's Coverston as a solution to sandwiching issues.

Lastly, the proposal advocated for funding MEV research to increase transparency and data by allocating MNDE DAO’s treasury funds to a dedicated research initiative.

Marinade will next seek community input on the proposal, which will be voted on and implemented based on the feedback received.