Executive Summary
The Problem
User trades introduce short, predictable price shifts within liquidity pools as balances adjust to reflect the new state. These shifts create narrow arbitrage windows that specialized external MEV bots are built to detect with high precision.
By continuously observing on-chain activity and reacting at minimal latency, these bots are able to execute backrun transactions that capitalize on the price movement created by the user swap.
The profits extracted through this process originate from the liquidity present in the pools and pricing inefficiencies introduced by the user’s trade. However, in the current model, none of this value stays within the system that generates it. Instead, the MEV generated by user activity is redirected outward and ultimately captured by validators and block builders.
This results in direct economic loss: the exchange creates value through user activity but does not retain it, while external participants capture the full upside.
The Solution
MEV-X Homelander introduces a post-swap on-chain hook that enables internal extraction of arbitrage opportunities generated by user trades. Once integrated, the hook triggers immediately after each swap and initiates our execution layer, which evaluates the updated state and performs the extraction within the same transaction that creates the MEV.
Because the backrun executes atomically inside the originating transaction, the process bypasses the public mempool entirely and removes the relevance of bundles, block-builder competition, and validator-side MEV capture. The opportunity never surfaces externally, and all execution remains confined to the platform’s environment.
The solution operates as a unified workflow: the hook signals the opportunity, and our execution layer completes the capture. All complex tasks such as opportunity detection, routing, and transaction orchestration are handled by our engine, which keeps integration minimal. By consolidating these steps in a controlled environment, the system retains the value generated by user activity without affecting the trading experience or adding operational overhead.
The Value
Internal MEV capture converts what is currently lost to external actors into value that remains within the platform’s economic domain. In the current execution model, the MEV generated by user activity accrues primarily to validators and block builders. With internalization, this value is retained by the platform and can be directed according to its own priorities.
The profit recovered through this process can be allocated across the platform, the user, and the service operating the execution layer, following a distribution model defined at integration time. This establishes a recurring on-chain revenue channel without adding friction to the trading experience or requiring the platform to operate its own MEV infrastructure.
By handling value capture through a coordinated and controlled process, the system increases economic efficiency, aligns stakeholder interests, and reinforces the stability of the liquidity environment.