Emma, these are fantastic questions! Let me try to explain why we need both layers, using an analogy.
The Traffic Laws Analogy:
Imagine someone asked: “If some cars have really good brakes and collision detection, why do we need traffic laws?”
The answer: Individual cars can have great safety features (like app-layer MEV protection), but you still need traffic laws (protocol-layer rules) because:
- Not every car has good brakes
- Safety features only work within that car
- Interactions between cars need coordination
- New drivers benefit from baseline rules
Same logic applies to MEV protection:
App-Layer Protection (Uniswap’s chained actions):
- Like a car with great brakes
- Protects users within that app
- Requires each app to build its own solution
- New apps are vulnerable until they implement protection
Protocol-Layer Protection (ePBS):
- Like traffic lights and speed limits
- Protects everyone by default
- Works across all apps, even ones that don’t build custom MEV protection
- Catches MEV vectors we haven’t discovered yet
To Answer Your Specific Questions:
1. Can app-layer solutions cover all MEV vectors?
No, because some MEV is cross-protocol. Example:
- You swap on Uniswap (Uniswap protects this)
- Price moves, triggering liquidation on Aave (Aave can’t see Uniswap’s pending tx)
- MEV bot front-runs the liquidation (happens between protocols)
App-layer protection works within a protocol but breaks down when transactions compose across multiple protocols.
2. Is composability the problem?
Yes! DeFi’s superpower is composability — calling multiple protocols in one transaction. But this creates cross-protocol MEV that no single app can solve.
Example transaction:
Even if each protocol has MEV protection, coordinating across all 5 is nearly impossible. Protocol-level solutions (ePBS) protect the entire transaction sequence.
3. What about new/unknown MEV vectors?
This is huge. In 2020, nobody knew about:
- Sandwich attacks (discovered 2021)
- Just-in-time liquidity MEV (discovered 2022)
- Cross-chain MEV (discovered 2023)
If we rely on apps to build protection, there’s a window where new MEV vectors are exploited before apps patch them. Protocol-layer protection catches novel attacks by default.
4. Gas costs:
ePBS should reduce costs because:
- Less MEV extraction = less value lost to bots
- More efficient block building = better block packing
- Reduced mempool congestion = lower priority fees
But it’s not free — ePBS adds some consensus overhead. Net effect should be positive.
5. Should you assume ePBS ships?
Build for both scenarios:
- Short term (2026): Integrate app-layer MEV protection if critical for your use case
- Long term (2027+): Assume ePBS provides baseline, add app-layer for specialized needs
The “Both” Answer:
We need both because:
- Protocol layer provides universal baseline (70% MEV reduction for everyone)
- App layer adds specialized protection (eliminating the remaining 30% for specific use cases)
Uniswap’s chained actions are great and we still need ePBS. They’re complementary, not mutually exclusive.
Does this help clarify?