According to CoinDesk, MetaMask, the most popular cryptocurrency wallet on Ethereum, has launched a new feature this week aimed at helping users avoid Maximum Extractable Value (MEV).
The optional new feature, called “Smart Transactions,” will allow users to submit their transactions to a “virtual transaction pool” before they are officially added to the blockchain. According to Consensys, the development company behind MetaMask, this virtual transaction pool will prevent certain types of MEV strategies and help users achieve lower transaction fees through simulated transactions.
When users want to make transactions on a blockchain like Ethereum, they typically send the transaction data to a public waiting area called the public transaction pool, which is filled with various bots and traders. Builders and searchers on the Ethereum network then work together to assemble these transactions into blocks, which are eventually recorded on the blockchain. However, this process involves a phenomenon called Maximum Extractable Value (MEV).
MEV refers to the additional profits that blockchain operators can gain from users by previewing or rearranging transactions, similar to behind-the-scenes trading/pre-trading behavior in traditional financial markets. MEV has many negative impacts on the operation of Ethereum, such as increasing user costs, slowing down transaction speeds, and even causing transaction failures under certain network conditions.
MetaMask aims to address this issue through an innovative “virtual transaction pool.” This virtual transaction pool also involves builders and searchers, but if they do not complete transactions according to the prices provided by MetaMask, they will face economic penalties.
MetaMask’s virtual transaction pool is fundamentally different from traditional private transaction pools due to its large network scale, transparent operation, and novel incentive system. According to Jason Linehan, the Director of Special Mechanisms at Consensys, approximately 95% of these operators have already joined MetaMask’s virtual transaction pool plan, which will be gradually rolled out this week. Linehan also pointed out that the “Smart Transactions” feature allows users to track their transaction progress directly within MetaMask. In typical cases, users would need to visit external websites like Etherscan to view this information. He believes that this is an important step for MetaMask to achieve its larger vision.
Linehan said in an interview, “MetaMask’s solution, its virtual transaction pool, is somewhat similar to a private transaction pool. This solution is becoming increasingly popular in the Ethereum ecosystem, as it effectively ensures transaction privacy and prevents MEV. This feature is the first step in MetaMask’s development roadmap, which aims to fundamentally change how MetaMask routes transactions to Ethereum behind the scenes.”
However, private transaction pool services can sometimes raise concerns about centralization because they allow intermediaries to access transactions before they are published to Ethereum. In response to these concerns, Consensys emphasized that its virtual transaction pool is different and necessary for addressing Ethereum’s significant hidden costs. Linehan stated,
