How Does the FSS (First-Seen-Settlement) Rule Attempt to Prevent MEV?
The First-Seen-Settlement (FSS) rule is a proposed mechanism where the first time a transaction is seen by the network (i.e. the time it enters the mempool) is used as a binding commitment for its execution. This prevents miners/validators from using their position to reorder transactions based on gas fees or profit potential.
The transaction is settled based on its time of entry, not the time of block inclusion, removing the miner's ability to arbitrarily sequence for profit.
Glossar
Trusted Execution Environment
Environment ⎊ Trusted Execution Environment refers to hardware-based security modules used by oracle providers to execute sensitive data processing and aggregation in an isolated environment, protecting the computation from the host operating system.
Batch Auctions
Mechanism ⎊ Batch auctions, within cryptocurrency and derivatives markets, represent a simultaneous order submission and execution process, differing fundamentally from traditional continuous limit order books.
Transaction Ordering
Sequencing ⎊ Transaction ordering within cryptocurrency, options, and derivatives markets establishes the chronological execution of trades, critical for maintaining systemic integrity and preventing manipulation.