Ethereum Layer 2 Networks Face Economic Inefficiencies Due to MEV Bots

On several Ethereum Layer 2 networks, Miner Extractable Value (MEV) bots are consuming over 50% of gas fees while paying disproportionately low fees, leading to significant economic inefficiencies and scaling bottlenecks. According to NS3.AI, privacy technologies such as encrypted mempools, stealth addresses, and Trusted Execution Environments are emerging as crucial solutions to mitigate MEV extraction and front-running attacks. Despite advancements in zero-knowledge proof costs and privacy tools, challenges related to developer experience, coordination, and regulation continue to hinder widespread adoption among retail and institutional users.