A First Study of MEV on an Up-and-Coming Blockchain: Algorand

Maximal Extractable Value (MEV) significantly influences network incentives, consensus safety, and economic dynamics, and has been extensively studied within the Ethereum blockchain domain. However, MEV is not specific to Ethereum, and extends to other blockchain platforms with differing properties, such as Algorand. Algorand, a smart-contract-based blockchain employing a Byzantine-Fault Tolerant consensus mechanism and Pure-Proof-of-Stake, is characterized by a First-Come-First-Serve transaction ordering mechanism and minimal fixed transaction fees. This paper provides the first exploration of the MEV landscape on Algorand, focusing on arbitrage MEV patterns, key actors, their strategic preferences, transaction positioning strategies, and the influence of Algorand's network infrastructure on MEV searching. We observed 1,142,970 arbitrage cases, with a single searcher executing 653,001. Different searchers demonstrated diverse strategies, reflected in the varied distribution of profitable block positions. Nonetheless, the even spread of arbitrage positions across a block indicates an emphasis on immediate backrunning executions. Furthermore, we identified 265,637 instances of Batch Transaction Issuances, where an address occupied over 80% of a block with a singular transaction type.