After eight consecutive days of brutal empirical dissection, we have seen all the fatal traps in Midnight's tokenomics and cross-chain infrastructure. However, as hardcore traders who insist on measuring the market with underlying code logic, today we must turn our gaze to the deepest workings of the entire protocol to thoroughly tear open the ugliest scar covered by the cloak of 'decentralized privacy'—the monopoly of centralized sequencers and the invisible tax of MEV.
The dictatorial ghost of zero-knowledge proofs
Input Output Global has thoroughly elaborated on the impeccable zk-SNARKs algorithm in the white paper, yet strategically blurred the issue of transaction ordering rights in the early stages of the network. Looking across all the high-performance layer two networks and sidechain infrastructures currently touted in the crypto world, they all heavily rely on centralized sequencers operated by official entities during their launch phases. This means that while zero-knowledge proofs can guarantee absolute privacy for your transaction data, the centralized node responsible for receiving, ordering, and packaging your transactions possesses a terrifying level of unilateral dictatorial power.
The MEV meat grinder that is deliberately ignored
In the real financial battlefield, what often determines trading gains and losses is not the price at which you buy, but the absolute priority of your trade execution. When Midnight attempts to build a massive compliant privacy financial empire, the privileges in the hands of the sorter evolve into an extremely efficient money printing machine. Those market makers and capital giants deeply tied to official interests can gain incredibly precise insights into retail traders' trading intentions by bribing the sorter or directly controlling nodes. They exploit microsecond time differences to recklessly implement front-running, pinging, and sandwich attacks in this unregulated cyber dark pool, crazily squeezing the profits that retail traders should have obtained in the form of MEV (Maximum Extractable Value).
The complete loss of anti-censorship characteristics
What chills the spine even more is that once this sorter hegemony combines with Midnight's 'compliant audit backdoor,' it will directly announce the complete death of the decentralized anti-censorship spirit. When centralized sorters hold absolute power over trading life and death, they can easily blacklist any address that does not align with Wall Street interests based on a piece of paper from real-world regulatory agencies, refusing to package all its trades. The kind of permissionless freedom you take for granted on the Ethereum mainnet is as fragile as a scrap of paper in this compliant enclave built of algorithms and capital.
Final advice
Mathematical formulas in cryptography never lie, but the humanity controlling the sorter is forever greedy. If you are still blindly believing in the decentralized privacy vision promoted by officials, yet cannot see the blood-sucking MEV machine hidden in the black box of trade packaging, then all the real money you invest in this network is merely providing a continuous stream of profit nourishment for those old gods who monopolize the underlying computing power. In this cruel cycle of stock game, blind faith that cannot comprehend the underlying exploitation logic is destined to result in extremely painful wealth zeroing.
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