Ordering So Fair It Ain't Fair Ordering
summary
Argues that fair ordering mechanisms ignore the actual MEV economics and can make some DeFi users worse off by constraining permitted permutations. Models the issue as a two-player game and constructs an adversarial liquidation-style protocol (inspired by Liquity LUSD) that exploits large random permutation sets of size Omega(n!) to guarantee worse user value. Proves lower bounds via a finite-group uncertainty principle tying fairness loss to the Fourier degree of payoff functions, and notes LP bounds for top-transaction FCFS as a partial positive result.
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chapters (10)
- 0:00Intro
- 1:47What is fair ordering?
- 3:26Fair Ordering is a Lie!
- 5:52Game Theory, Game Theory, Everywhere Consider a two player game
- 8:52Why does this represent FO protocols?
- 9:40Defeating Fair Ordering: Interpretation
- 11:06What are examples of payoffs?
- 12:16How do you choose L?
- 14:04Defeating Fair Ordering: The Claim
- 16:35Application Specific Order Preferences
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