A Study of MEV Extraction Techniques on a First-Come-First-Served Blockchain

We argue that transaction ordering techniques for capturing Maximal Extractable Value (MEV) in blockchains where fees can influence the execution sequence do not directly apply to blockchains where execution order is determined based on transactions' arrival times. The First-Come-First-Served (FCFS) nature of such blockchains can yield different optimization strategies for MEV searchers, requiring further study. This paper explores the applicability of MEV extraction techniques from fee-based blockchains on an FCFS blockchain such as Algorand. Our results reveal similarities to recent trends on fee-based blockchains like Ethereum, with most arbitrages occurring through backruns on pending transactions in the network. However, we attribute the outcomes to different underlying reasons. While we do not observe any latency optimizations between specific searchers and block proposers, we discuss that this is due to searchers adopting similar strategies and Algorand's relay-based network infrastructure. We finally propose a novel strategy for searchers through Batch Transaction Issuance, leading the network to congestion and enabling frontrunning-based ordering techniques.