LayerZero has proposed Otter, an automated market maker mechanism designed to eliminate the informational advantages that block builders exploit to profit from front-running and sandwich attacks. The mechanism uses batch auctions based on VCG (Vickrey-Clarke-Groves) auction theory, where trade execution outcomes are determined by the collective pool of bids during a batch window rather than transaction ordering. Extracted value that would normally flow to MEV extractors is redirected to liquidity providers instead of being captured by arbitrageurs. The system carries a significant caveat: its guarantees only hold if the underlying consensus layer is censorship-resistant, which represents a meaningful constraint on the proposal. The paper is pending peer review with no deployment timeline or token launch details.
Source: Read the original article
