Rebar Labs is preparing to launch a Bitcoin-native platform designed to protect traders from harmful maximum extractable value (MEV) tactics, such as front-running, by the end of 2024, according to CEO Alex Luce. Luce revealed that the company is already onboarding Bitcoin miners representing a significant portion of the network’s total hashrate.
MEV Shield to Address Bitcoin’s Growing Trading Risks
As Bitcoin’s decentralized exchanges (DEXs) and layer-2 (L2) solutions continue to expand, new risks, including harmful MEV strategies, have emerged. MEV refers to the profits miners can make by reordering or inserting transactions within a block, often at the expense of traders. Luce highlighted front-running as the most prevalent MEV issue on Bitcoin today.
“Front-running is happening fairly often on Bitcoin,” Luce said. Rebar’s new platform, known as Shield, aims to offer protection against these risks. It draws comparisons to Ethereum’s Flashbots, which has shielded approximately $43 billion in DEX transactions from MEV since 2021, according to data from Dune Analytics.
Enhancing Interoperability and Miner Incentives
Rebar’s Shield seeks to enhance the fragmented Bitcoin DEX ecosystem by improving interoperability and protecting users from harmful MEV. Luce noted that liquidity on Bitcoin’s DEXs is currently fragmented, with little coordination across platforms. “That’s where good MEV comes in—someone can come in, even out the prices, and help users with execution,” Luce explained.
Additionally, the platform aims to benefit Bitcoin miners by offering higher returns. Rebar is in talks with major miners in the space and hopes to launch Shield with a significant portion of Bitcoin’s hashrate onboard.
Bitcoin’s Evolving Ecosystem
Bitcoin’s use as a simple peer-to-peer payment network has evolved, particularly after the Taproot upgrade in 2021, which enabled more complex activities such as token trading and the creation of non-fungible tokens (NFTs). However, Bitcoin-native decentralized finance (DeFi) is still in its early stages, with relatively low daily trading volumes.
“Today’s volume is in the millions, max. It’s not significant,” Luce said, describing the current phase of Bitcoin DeFi as an “early beta” with limited user engagement. However, Rebar anticipates a growing user base over the next 12 to 24 months.
Bitcoin-native L2 solutions, including Babylon, Core Chain, Rootstock, and Stacks, are also gaining momentum, with around $2 billion locked on these platforms as of October 2024, according to DefiLlama. Luce believes that as L2s gain popularity, ensuring good execution on Bitcoin itself is crucial to prevent users from migrating entirely to L2 platforms.
