Jascha Samadi argues in a recent long-form essay that MEV cannot be eliminated by design. Ordering value, he says, behaves like a conservation law: whether it appears in Ethereum’s open auctions, in Canton’s permissioned ledger architecture, or in traditional finance under labels such as payment for order flow, the economic value tied to transaction sequencing does not vanish. It moves.
In that framing, the useful question for investors is not whether MEV exists. It is who holds the power to price ordering rights.
Samadi compares the issue to physics. Energy does not disappear; it changes form. Transaction ordering works the same way in any ledger that processes trades against valuable shared state. The value embedded in execution order can be auctioned, hidden, burned, or renamed, but it is still there. Ethereum turned it into a public market. Permissioned chains such as Canton bury it inside contracts and confidentiality arrangements. Traditional finance spent a century wrapping similar economics in structures like payment for order flow and last look. Hyperliquid, more recently, chose to burn the proceeds.
The essay builds on the author’s earlier work on block construction and the transaction supply chain, tracing the path from a wallet click to final block inclusion. It follows ordering value across four institutional settings: public markets, private ledgers, regulated intermediaries, and public auctions. The central divide, Samadi writes, is not presence versus absence of MEV. It is whether the price of ordering is visible or hidden.
Shared state creates economic value in sequence
The essay starts with the design choices behind open, permissionless blockchains. Anyone can run a node and verify network history. Anyone can submit a transaction. Participation in consensus, meaning the right to produce blocks and extend the chain, is open and earned through capital or work rather than granted by a gatekeeper.
The crucial choice sits beneath all of that: every participant replicates the same ledger. There is a single global state visible to all participants, and each node re-executes transactions to verify that the rules were followed. That shared global state is what makes these systems different from ordinary distributed databases.
Because applications live inside the same state machine, they can read from and compose with each other synchronously. A lending protocol can use a price oracle it never coordinated with, accept collateral tokens issued by a third party, and be wrapped by an aggregator that never asked anyone for approval, all inside one atomic transaction. Samadi points to this permissionless composability on top of jointly verifiable state as the source of much of what is genuinely novel in on-chain finance, including open verifiability, credible neutrality, and the ability of unrelated parties to assemble markets at deployment speed.
The same design also creates a second consequence. If everyone shares the same state, transactions have to be applied in some order, and when multiple transactions touch the same state, order changes outcomes. Two trades against the same liquidity pool are not interchangeable: the one that lands first gets the better price. A liquidation usually belongs to the first caller to arrive. An arbitrage opportunity exists only for the transaction that gets ahead of the rest. Position in the sequence is therefore a form of access to economic opportunity, and scarce access with economic value rarely remains unpriced for long.
Ethereum made ordering into a public auction
Ethereum is the clearest example in the essay of what happens once that value becomes legible. An industrial supply chain formed around the path between the user’s wallet and the final block: searchers, builders, relays, and validators.
Searchers scan the public mempool and state for extractable opportunities, including cross-pool arbitrage, liquidations, and, at the predatory end, sandwich trades around visible user orders. Builders assemble candidate blocks, packing and ordering transactions and bundles to maximize total block value. Under proposer-builder separation, or PBS, validators no longer have to build blocks themselves. They can auction that right through relays to the highest bidding builder. Upstream from that, order flow itself has become an asset that can be sold, with wallets and applications selling the right to interact with user transactions.
Samadi notes that this system is often described as parasitic, and parts of it may be. But he says a more precise description is that PBS shows what a market for a scarce resource looks like once that resource is openly acknowledged.
Ordering was always valuable. Ethereum’s architecture made that value visible, contestable, and measurable.
On that view, the later research agenda around order flow auctions, MEV rebates that return extraction to the users whose trades create the value, encrypted mempools, and batch auctions is not an attempt to deny the phenomenon. It is an attempt to govern it by deciding who captures ordering value and how much of it flows back to users.
Canton removes the public market, not the discretion to order
The essay contrasts that model with Canton, which it describes as inverting nearly every one of those design choices. Canton has no global state and no global transparency. It operates as a network of networks, where each participant runs a validator and holds only the contracts to which it is a party, with data propagated strictly on a need-to-know basis.
That privacy model extends into the internals of a single transaction. With sub-transaction privacy, even a counterparty to one branch of an atomic transaction cannot see the other branches. Samadi gives the example of a bank settling the bond leg of a delivery-versus-payment trade without learning the commission terms embedded in another branch of the same atomic commit. Canton also has no public mempool. Pending transactions are never broadcast to the full network and are delivered only to the relevant stakeholders. Its ordering layer is blind, with synchronizer operators ordering cryptographic confirmations without seeing transaction contents.
The essay breaks Canton’s MEV posture into four mechanisms:
- There is no public mempool to snipe, so the visible pending order flow that underpins front-running at the network layer is absent.
- Ordering is blind, meaning operators cannot front-run what they cannot read.
- There is no builder or searcher auction, no priority fee bidding for position, and no PBS supply chain. Ordering is performed as a utility function by identified institutions under contract and legal liability, not by anonymous actors.
- Ordering rules sit in the application layer and in smart contract logic, so exchange-style fairness rules such as price-time priority can be enforced by construction rather than by relying on validator behavior.
Samadi also points to the scale behind this design. Broadridge’s distributed ledger repo platform settles about $8 trillion to $9 trillion in monthly repo volume on Canton infrastructure, or about $354 billion per day. The essay says that makes it the largest tokenized real-world asset settlement platform currently in operation. Public tracking data, it adds, shows around $345 billion in represented asset value on the network, with claimed monthly throughput close to $9 trillion.
That fit with its flagship use cases is real, the essay says. Interbank repo and collateral markets care more about privacy, permissioning, and recourse-backed finality than censorship resistance. No bank is going to broadcast its funding position into a public mempool, and no regulator is likely to license critical market infrastructure where a software failure could mean irreversible loss.
For that reason, Samadi expects this split to persist. Permissioned networks are likely to keep winning in institutional back-office workflows such as settlement, collateral mobility, and post-trade processing, where participants are known, trades are pre-negotiated, and confidentiality and recourse are requirements rather than preferences.
Observed MEV may be low, but the sequencing power remains
The narrower question, though, is whether this architecture eliminates MEV or does something more familiar to it. Samadi’s answer is that someone is still sequencing.
On Canton, ordering discretion has not disappeared. It has been reassigned. In the public layer, it sits with synchronizer operators. On private synchronizers, it sits with a single company, and the essay says that most volume today is in practice settled on the latter.
That discretion is still there, only now it is non-competitive and non-observable, constrained by confidentiality agreements and terms of service rather than erased by cryptography. As a result, the strongest claim a permissioned network can make under the banner of “no MEV” is much narrower than it sounds: there is no permissionless MEV market, and there is no public evidence of MEV extraction. Those are different claims from saying ordering value is gone.
The essay offers a second reason why observed MEV on these networks may be close to zero right now: the use case itself. Canton’s flagship workflows, such as bilateral repos and pre-arranged delivery-versus-payment settlement, involve very little contested shared state. In a repo agreement where price, size, and counterparty are all fixed before the trade reaches the ledger, there is little to sandwich. Ordering a queue of pre-negotiated settlements does not generate meaningful economic value on any chain or in any design. In that sense, the current record is better described as not yet falsified, not proven.
The real test would come if such a network started to host genuinely competitive market structures: a shared central limit order book, a liquidation engine, oracle-triggered margin calls, or a tokenized Treasury market traded at scale. At that point, the order in which messages reach the synchronizer would once again become economically decisive. The participants best positioned to capture the value would be those with lower latency, physical proximity, or stronger operator relationships.
The rent would not disappear. It would move into privileged and opaque channels: preferred connectivity that never shows up on a fee sheet, or informational proximity that never appears anywhere in public. In Samadi’s account, the architecture effectively reintroduces a trusted intermediary with sequencing discretion and rebuilds the trust model of traditional finance on top of a ledger.
Traditional finance shows what hidden ordering rents look like
That trust model has been running for decades in traditional markets, and Samadi says the enforcement record is revealing. Opacity did not stop extraction of ordering value. Opacity is what made extraction profitable.
He treats traditional market structure as evidence that what crypto now calls MEV was never truly solved there. It was prohibited by rule in some areas, imperfectly policed in others, and pushed into channels victims could not observe in real time.
The essay points to payment for order flow, which turned retail order flow itself into a monetizable asset. In 2021 alone, U.S. brokerages collected about $3.8 billion in payment for order flow, meaning the value of seeing and internalizing order flow was captured through bilateral agreements between brokers and wholesalers that were invisible to the customers whose orders created the product. Robinhood paid a $65 million SEC settlement in 2020 over misleading statements about execution quality tied to that arrangement.
Dark pools appear as another example. They were marketed as protection for institutions against predatory order flow, but the essay notes a series of settlements in the opposite direction. Barclays paid $70 million in 2016, and Credit Suisse paid $84.5 million, over misstatements about how their dark pools operated, including cases where high-frequency order flow that customers had been told was excluded was in fact participating. ITG paid $20.3 million in 2015 because it operated an internal desk inside its own dark pool that traded using confidential client order information.
In foreign exchange, Barclays paid $150 million in 2015 over its use of “last look,” the dealer option to reject a trade after observing the direction of a price move, as well as coordinated sharing of customer order information before benchmark fixes. The essay says cumulative fines for similar conduct across the industry exceeded $10 billion.
The pattern across those cases is the same. Ordering value was real. Extraction was performed by trusted intermediaries sitting in the sequence. The affected parties could not observe it in real time. The facts surfaced only years later, through whistleblowers and enforcement action. That, Samadi argues, is one operational version of “MEV-free by design”: ordering rents are adjudicated by compliance departments and discovered by regulators rather than priced in a public market.
Hyperliquid chooses public pricing and burns the proceeds
Hyperliquid is presented as the transparent alternative. It takes the same structural rent, places it into a public auction, and routes the proceeds into a public pool.
Its architecture has no public mempool, and sequencing is handled at the consensus layer, so it has long been described as resistant to MEV under a mempool-based definition. Samadi agrees with that narrower point. But he says execution advantage still exists, because under the structural view it always does. Priority goes to participants that engineer the lowest latency. Sophisticated market makers win queue position through infrastructure optimization and network proximity, functionally similar to colocation. The advantage has existed for a long time, has clear economic value, and is only accessible to participants with the capital and channels to build it. The rent was being captured already; it just was not visible on anyone’s dashboard.
According to the essay, Hyperliquid formalized that dynamic in April this year by introducing priority fees. The mechanism is a public, continuously repeated Dutch auction denominated in HYPE. What is being sold is exactly what low latency had been buying in practice: earlier access to incoming trade data and earlier placement in the execution queue.
The effect is measurable with unusual precision, Samadi writes. Every basis point paid in priority fees improves end-to-end latency by roughly 45 milliseconds. An advantage that had been implicit, private, and gated by engineering capability was turned into an explicit, public, continuously repriced market that is open to all participants.
The key divide is not MEV versus no MEV, but public price versus hidden price
The essay separates two properties of this mechanism. The first is that it formalizes a paid priority tier, which is open to criticism. There is now a visible queue-position tax where none was openly acknowledged before. But the relevant comparison, Samadi argues, is not a market with no priority tier at all. It is the same tier when it was invisibly allocated through capital expenditure and connectivity, with a posted price of zero.
A visible and priced advantage is more honest, and easier to correct, than an implicit and free one. A visible market can be measured, debated, capped, and redesigned. An invisible market can only be discovered after the fact.
The second property is where the proceeds go, and Samadi treats that as the genuinely novel point in market structure. The fees are burned. The clearing price for execution priority does not go to the venue operator, is not shared with favored counterparties, and is not tucked into a bilateral arrangement. It is removed from supply, which the essay says is economically equivalent to distributing the value pro rata to every holder of HYPE.
He contrasts that with the way equal value moves in traditional markets: colocation fees go to exchange shareholders; payment for order flow is split between wholesalers and brokers under contracts end customers never see; information rents from dark pools and last look accrue to whoever occupies privileged seats until part of it is clawed back by enforcement. Hyperliquid, by contrast, puts the same structural rent, the value of position in sequence, in the open, lets a permissionless auction discover the price, and directs the proceeds into a public pool.
The queue still exists. What changes is that its price is public and its economic return is shared with every holder rather than settled inside closed bilateral structures.
Samadi closes with a broader claim. Meaningful comparisons across chain designs are not about “MEV” versus “no MEV.” Any venue that sequences valuable state transitions will structurally generate ordering value. The questions that actually distinguish market designs are narrower and more concrete: who holds ordering power, whether that power is contested or assigned, whether it is observable or hidden, and whether its rents are publicly priced and redistributed or quietly captured by whoever stands closest to the sequencer.
Permissioned networks answer those questions through governance, with named operators, legal accountability, and institutional assurances. For pre-negotiated settlement workflows, where ordering carries little economic value to begin with, that answer may be sufficient, and the adoption data reflects that. For genuinely competitive markets, the essay says both crypto’s short history and traditional finance’s longer one point in the same direction: denied ordering value tends to be captured in the dark, while acknowledged ordering value can be priced, audited, and returned to the market that creates it.
In that sense, ordering value is conserved across designs. The difference is whether the price is public.