Leverage
LP-governed MEV auction hook that returns arbitrage value to affected liquidity providers.
Demo
About
Levy is an LP-governed MEV auction hook built around a simple idea: liquidity providers should benefit from the value extracted when an AMM’s price becomes stale. AMM pools price assets based on the ratio of their reserves. When the external market price changes, the pool continues quoting its previous price until a trade corrects it. The first arbitrageur to trade against that stale price captures the difference directly from the pool’s reserves creating a recurring loss for LPs. Today, the right to capture that value is typically decided by gas auctions, private mempool access, and low-latency infrastructure. LPs bear the loss but have no say in who captures the opportunity or where the value goes. Levy replaces this race with an on-chain auction. During each epoch, arbitrageurs bid for the exclusive right to trade first against the pool. Instead of the arbitrage profit being silently extracted, the winning bid is distributed to LPs who were in the pool before the epoch began the same LPs who would otherwise have absorbed the loss.
How it's made
Levy is designed as an LP-governed MEV auction hook for AMM pools. Its core mechanism is organized around epochs: defined time periods during which the right to make the first arbitrage trade against a pool is auctioned on-chain. Rather than allowing arbitrageurs to compete through gas bidding, private order flow, or latency advantages, Levy creates a transparent bidding process for exclusive first-trade access. Arbitrageurs bid for the opportunity to correct a stale pool price after the external market moves. The winning bidder receives the right to execute that first trade for the epoch. The value paid by the winner is not treated as protocol revenue or captured by external infrastructure. It is distributed to liquidity providers who were already providing liquidity before that epoch started. This aligns the economics of arbitrage with the people whose capital is exposed to stale-price losses. The project is built primarily in Solidity, with a Foundry-based smart-contract development setup. The repository also includes tests, deployment scripts, and a frontend integration, allowing the auction-based MEV redistribution concept to be demonstrated as a complete application.