First-Spammed, First-Served: MEV Extraction on Fast-Finality Blockchains

Abstract: This research analyzes the economics of spam-based arbitrage strategies on fast-finality blockchains. We begin by theoretically demonstrating that, splitting a profitable MEV opportunity into multiple small transactions is the optimal strategy for CEX-DEX arbitrageurs. We then empirically validate these findings on major Ethereum rollups. To uncover the structure of reverted transactions, we construct execution graphs from transaction traces and systematically search them to identify DEX or router interactions and targeted liquidity pools. This analysis reveals that 80\% of reverted transactions are swaps with approximately 50\% targeting USDC-WETH pools on Uniswap v3/v4. These patterns intensified following the March 2024 Dencun upgrade, which lowered L2 gas costs and made spam-based arbitrage economically viable. Counterintuitively, we find that these reverted MEV transactions rarely engage with Priority Fee Auctions (PFAs), preferring to submit duplicate transactions rather than bid for inclusion. Moreover, reverted transactions cluster at the very top of blocks on fast rollups like Arbitrum and ZKsync, indicating an intense latency race and revealing the fragility of fee-based ordering under sub-second block times.