Antitoxic-MEV mechanism to tackle blockchain’s ‘invisible taxes’

By creating an antitoxic-MEV mechanism with an innovative dBFT consensus model and enveloped transactions, Neo X makes it possible to develop fair and interoperable DApps across blockchains.

The blockchain industry is grappling with the significant challenge of maximal extractable value (MEV) — an issue that silently drains money from users’ pockets, acting like an “invisible tax.” The problem occurs when block producers manipulate transaction orders to maximize their profits, undermining the fairness and integrity of blockchain networks.

As the stakes rise, the consequences of MEV are becoming more severe. What started as relatively minor issues, such as increased transaction fees and network congestion, has escalated into more serious risks like front-running , sandwich trading and liquidation arbitrage, leading to billions of dollars in losses.

Miners can control which transactions are added to a block and their order

In response, developers are exploring new consensus mechanisms and various cryptographic techniques to address the toxic MEV , which poses a significant threat to the decentralization and fairness that are foundational to blockchain technology. However, a new method is disrupting the game by wrapping transactions in a protective layer to eliminate the risk of malicious actors.

Combating toxic MEV

Neo X , which acts as a bridge between Neo and the widely used Ethereum Virtual Machine (EVM) network, introduces an innovative approach to creating an environment resistant to MEV attacks. The platform represents a critical step forward for Neo, a blockchain platform founded in 2014 with the mission of pioneering the future of the digital economy.

As an EVM-based sidechain, Neo X includes features such as the delegated Byzantine fault tolerance (dBFT) consensus mechanism and enveloped transactions, making interactions MEV-resistant.

The dBFT consensus mechanism ensures that the system remains secure and reliable, even if some participants in the blockchain network act maliciously or fail to perform transactions. Thus, networks can make decisions quickly and securely.

Additionally, enveloped transactions are security technologies that make it difficult for malicious parties to exploit the system by wrapping the original transaction in a protective layer. It is especially important in decentralized applications (DApps) where transaction integrity is critical, as it prevents miners’ manipulations.

How Neo X chain achieves MEV resistance. Source: Neo

Beyond its unique capabilities, including the anti-MEV mechanism, Neo X addresses the interoperability challenge by establishing a native bridge between Neo X and Neo N3. This bridge facilitates the seamless transfer of assets and data across different blockchain ecosystems, tackling issues of cross-chain scalability and liquidity.

These technological standards position Neo as an attractive alternative for users and developers and align with its goal of driving technological advancement within and beyond its ecosystem. Neo’s interoperability design has the potential to increase liquidity access and foster industry collaboration.

Empowering blockchain builders

Neo X is focused on building a robust ecosystem by integrating with prominent players in the Web3, blockchain and artificial intelligence industries .

The integration effort will support over twenty Web3 projects, including Web3 infrastructure builder SubQuery, decentralized AI infrastructure provider Phoenix, and Web3 game onboarding company ZeroX. Through these partnerships, Neo X prioritizes developing the infrastructure and tools developers need to build and deploy DApps within the ecosystem.

As part of its commitment to innovation, Neo X is launching the $20 million Elevate Program , which will support innovative early-stage projects contributing to the ecosystem’s growth and dynamism. With the Elevate Program, the platform aims to set new standards in Web3 security and design, foster the next generation of DApps, and pave the way for groundbreaking new use cases in the ecosystem.

Neo will offer up to $20 million to support innovative projects on Neo X. Source: Neo

Leveraging the Elevate Program, Neo X aspires to become the gateway to the Neo ecosystem and the go-to blockchain platform for creating decentralized and secure smart economies.

Additionally, a series of online and offline events will be held to connect with Web3 developers and entrepreneurs across multiple countries and regions. These events include the Elevate funding program, Neo X Grind Hackathon, Token2049 in Singapore, Binance Blockchain Week in Dubai and Devcon 2024 in Bangkok.

Ultimately, the launch of the Neo X sidechain mainnet and the Elevate Program will provide blockchain creators with the financial support and technology tools they need to scale up their new application development.