Since 2020, miners on the Ethereum blockchain have extracted around $600 million from other investors by miners, according to a new report by the Bank for International Settlements (BIS) focusing on common malpractice in the crypto mining industry.
The June 16 bulletin, “Miners as intermediaries: extractable value and market manipulation in crypto and DeFi,” suggests three key takeaways from the BIS' research on the functioning of the Ethereum protocol.
The first is hardly surprising, which observed that Ether (ETH) and decentralized finance (DeFi) protocols built on it “rely on validators or ‘miners’ as intermediaries to verify transactions and update the ledger.” The main thesis of the report is formulated around the abuses these intermediaries can make of their role in the form of “miner extractable value” (MEV):
“Since these intermediaries can choose which transactions they add to the ledger and in which order, they can engage in activities that would be illegal in traditional...
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