Research · updated weekly
Field notes from the execution layer.
Original research on MEV dynamics, searcher behavior, and execution infrastructure. Grounded in data from millions of transactions.
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April 2026Crypto Industry Pushes SEC to Formalize DeFi Broker No-Action Guidance — Citadel and SIFMA Continue to OpposeOn April 13, 2026, SEC Staff issued a conditional no-action exemption for Covered User Interface Providers (CUIs), offering relief to DeFi front-ends that facilitate tokenized securities trades without custody. The guidance introduces MEV front-running as a key disclosure trigger for qualifying platforms. However, major financial players including Citadel and SIFMA continue to oppose efforts to formalize the guidance into binding regulation.Policy6 minApril 2026SIFMA and Citadel Securities Oppose SEC DeFi Broker Exemption; Crypto Industry Pushes for Formal RulemakingThe SEC's Division of Trading and Markets issued a no-action framework on April 13, 2026, exempting certain DeFi platforms from broker-dealer registration. Just thirteen days later, SIFMA and Citadel Securities filed formal opposition, challenging the staff-level guidance. The crypto industry is simultaneously pushing for official rulemaking rather than informal exemptions.Policy5 minMay 2026Consensys Files OCC Comment Letter Urging DeFi Carve-Out in GENIUS Act ImplementationConsensys submitted a formal comment letter to the OCC on May 2, 2026, challenging specific provisions in the proposed GENIUS Act stablecoin rulemaking. The filing argues that certain drafting choices could inadvertently pull decentralized finance infrastructure into a regulatory perimeter Congress never intended. Consensys does not oppose the broader framework but seeks targeted amendments to protect DeFi protocols from undue compliance burdens.Policy5 minMay 2026CLARITY Act Stablecoin Yield Compromise Finalized — Passive Yield Banned, Activity-Based Rewards PermittedThe Senate finalized stablecoin yield rules in the CLARITY Act on May 2, 2026, drawing a hard line between passive bank-like returns and rewards tied to on-chain activity. Shaped by Senators Tillis and Alsobrooks, the compromise has major structural implications for DeFi protocols, stablecoin issuers, and token designers. The distinction between passive yield and activity-based rewards is not semantic but a foundational regulatory boundary.Policy5 minMay 2026Major U.S. Banks Request Extension of GENIUS Act Comment Period to Delay Stablecoin ImplementationMajor U.S. banks have formally requested an extension of the public comment period for GENIUS Act implementing rulemakings as of May 2026. While the legislative authority is already enacted, banks are challenging the implementation timeline rather than the law itself. This procedural move has significant implications for protocol teams and developers building on stablecoin infrastructure.Policy5 minApril 2026Citadel Securities and SIFMA Oppose SEC DeFi Broker Exemption, Demand Full Registration for Tokenized Securities PlatformsCitadel Securities and SIFMA have formally opposed the SEC's April 13 staff statement exempting certain non-custodial DeFi interfaces from broker-dealer registration. Their argument goes beyond procedure, asserting that any platform facilitating tokenized securities trades should face full registration requirements. The opposition also targets MEV practices as a central concern in their DeFi broker fight.Policy5 minApril 2026DeFi Education Fund + 30+ Org Coalition Urges SEC to Formalize DeFi Broker-Dealer Guidance via Notice-and-Comment RulemakingThe DeFi Education Fund and a coalition of over 30 crypto organizations responded to the SEC's April 13, 2026 staff statement on non-custodial user interfaces and broker-dealer registration. The coalition argues the guidance should go through formal notice-and-comment rulemaking rather than being issued as informal staff guidance. The SEC's statement had conditionally exempted 'Covered User Interface Providers' from broker-dealer registration while naming MEV as a required disclosure topic.Policy5 minApril 2026EBA/ESMA Analysis: DeFi Protocols Are NOT Automatically Exempt from MiCA; Functional Control Triggers CASP ClassificationEuropean regulators EBA and ESMA have confirmed that deploying smart contracts on a permissionless blockchain does not automatically exempt DeFi protocols from MiCA regulations. Authorities apply a substance-over-form test, meaning developers or operators who retain functional control may be classified as Crypto Asset Service Providers. Protocol teams can no longer assume decentralization alone provides regulatory cover.Policy5 minApril 2026Citadel Securities and SIFMA Emerge as Opponents of SEC DeFi Broker-Dealer Exemption FormalizationCitadel Securities and SIFMA are pushing back against the SEC's proposal to exempt non-custodial DeFi user interfaces from broker-dealer registration. Their stance argues that any platform facilitating trades in tokenized securities should meet full broker-dealer requirements under a technology-neutral standard. The opposition signals a major industry divide over how traditional financial regulations should apply to decentralized infrastructure.Policy5 minApril 2026Sidley Austin Analysis: SEC DeFi Safe Harbor Requires Explicit MEV Risk Disclosures from Covered Interface ProvidersSidley Austin published a detailed legal analysis finding that MEV is an explicitly required disclosure category under the SEC's April 2026 DeFi safe harbor guidance. Front-end providers enabling users to interact with DeFi infrastructure for securities transactions must include clear MEV risk disclosures. The finding has significant compliance implications for interface providers operating under the new framework.Policy5 minApril 2026Jones Day Analysis: SEC CUI Statement Bans PFOF, Requires MEV-Related Protections as Named DisclosureThe SEC's April 13, 2026 staff statement created a conditional path for crypto interface providers to avoid broker-dealer classification, with MEV-related protections explicitly named as a disclosure requirement. A Jones Day analysis published seven days later confirmed that this naming is direct and unambiguous, not merely implied. The statement also bans payment for order flow, marking a significant compliance shift for crypto interface operators.Policy5 minApril 2026SEC April 13 Staff Statement on DeFi Broker-Dealer Exemption Analyzed: MEV Disclosure Explicitly RequiredOn April 13, 2026, the SEC Division of Trading and Markets released a staff statement creating a no-action framework for Covered User Interface Providers (CUIs), covering websites, browser extensions, mobile apps, and self-custody wallets involved in crypto asset securities transactions. The framework notably requires MEV disclosure as an explicit condition for CUI Providers seeking to operate without broker-dealer registration. This analysis breaks down what the new guidance means for DeFi front-end operators and their compliance obligations.Policy5 minApril 2026Sidley Austin Analysis: SEC April 13 Guidance Explicitly Leaves MEV Secondary Liability Unresolved for Trading Venues and SystemsThe SEC's April 13, 2026 staff guidance on decentralized finance user interfaces conspicuously omits any resolution of secondary liability related to MEV and connected trading venues. Sidley Austin LLP's client alert highlights this deliberate gap as potentially more consequential than what the guidance actually addressed. The ambiguity leaves trading platforms and system operators without clear regulatory footing on MEV-related compliance obligations.Policy5 minApril 2026Jones Day Analysis: SEC CUI Guidance Bans Payment for Order Flow, Requires MEV Protection DisclosuresJones Day's April 2026 analysis of SEC staff guidance on Crypto User Interface providers reveals a clear prohibition on payment for order flow. CUI providers receiving any compensation tied to transaction size, value, or success from parties other than the end user fall entirely outside the safe harbor. The analysis also highlights mandatory MEV protection disclosure requirements for compliant providers.Policy6 minApril 2026Sidley Austin: SEC Guidance Characterizes MEV as 'Inherent Structural Risk' Requiring Mandatory Disclosure and Mitigation ControlsSidley Austin published a detailed legal analysis in April 2026 interpreting SEC staff guidance that characterizes maximal extractable value (MEV) as a structural risk in decentralized crypto asset securities trading. The memo goes beyond the original SEC statement by explicitly naming MEV as a discrete regulatory risk category requiring affirmative disclosure and documented mitigation controls. This analysis carries significant compliance implications for DeFi platforms operating under SEC oversight.Policy5 minApril 2026Sidley Austin: SEC CUI Statement Leaves MEV Antifraud Liability Explicitly UnaddressedThe SEC's April 2026 staff statement created a no-action framework for Crypto User Interface Providers, carving out a broker-dealer registration exception. However, Sidley Austin's follow-up alert clarified that the statement is silent on MEV-related antifraud liability. Infrastructure teams must understand what protections the CUI framework does and does not provide.Policy5 minApril 2026SEC Issues No-Action Statement for DeFi Frontends: MEV Disclosure and Order Routing Transparency Now RequiredThe SEC Division of Trading and Markets issued File No. 4-894, a conditional safe harbor for DeFi frontend providers. Frontends can avoid broker-dealer registration by satisfying 12 conditions covering order routing transparency, MEV disclosure, neutral fees, and onchain record-keeping. The statement expires April 13, 2031.Policy5 minApril 2026SEC April 13 Statement Requires Disclosure of Policies to Protect User Trading Information From MEV Front-Running; Remedy Is Disclosure, Not ProhibitionOn April 13, 2026, SEC staff issued guidance clarifying wallet providers and DeFi interfaces are not broker-dealers, but must disclose MEV protection policies. The first time SEC has formally named MEV as a required disclosure category.Policy4 minFebruary 2026Why the Hardest Path CompoundsThe application layer in AI is commoditizing fast. Every model upgrade wipes out thin wrappers. The durable moat is the data layer: proprietary, domain-specific ground truth that models need but cannot generate on their own. MEV intelligence on Sui cannot be ported from Ethereum or Solana. The architecture is fundamentally different and the data requires purpose-built infrastructure. That is why we built Birdai from the data layer up.Analysis6 minFebruary 2026The L1 Debate Is Over. Now What Do You Invest In?The L1 wars are over. VCs are now picking winners at the application layer, but two DEXs with identical TVL and volume can have completely different execution quality. Standard due diligence misses how much value traders lose to MEV on each protocol. Birdai provides ground truth execution data that separates organic volume from searcher activity, giving VCs an information edge when evaluating and monitoring Sui DeFi investments.Analysis5 minFebruary 2026Understanding MEV on Sui: Why Architecture MattersSui has no public mempool and executes transactions in parallel, which makes traditional frontrunning structurally difficult. But MEV still exists, primarily as cross-pool arbitrage across Cetus, Turbos, FlowX, and DeepBook. Searchers monitor finalized state across checkpoints and respond within milliseconds. Sandwich attacks are hard on Sui, but concentrated arbitrage by a small number of operators can still extract significant value from traders.Research4 minFebruary 2026Searcher Dominance on Sui: What the Data ShowsMEV on Sui is heavily concentrated. A handful of addresses capture the vast majority of identified MEV transactions, while hundreds of others show only sporadic activity. This is partly because Sui is younger and its MEV tooling is less mature, and partly because there is no formalized auction mechanism to level the playing field. Concentrated extraction means less competitive pressure to return value to users, which has real consequences for traders and liquidity providers.Research3 minFebruary 2026Why MEV Auctions Need a Data LayerMEV auctions on Sui are emerging, but neither side knows what the flow is actually worth. Without historical data, a DEX routing through an auction cannot tell if it is getting 60% or 5% of extractable value. Birdai provides the longitudinal execution data that makes auctions accountable: benchmarking returns against observed extraction, creating competitive pressure on searchers, and enabling smarter auction design. Informed markets are more efficient markets.Infrastructure4 minJanuary 2026SIP-19 and the Future of Order Flow on SuiSIP-19 introduces validator tipping on Sui, creating the first explicit priority fee market on the network. This mirrors how Ethereum evolved from crude gas auctions to structured block building and relay infrastructure. Early tip adoption is concentrated among sophisticated participants, and tip amounts are still modest. Sui's object model could lead to per-pool priority dynamics rather than a global fee auction. This is the foundation for formalized MEV infrastructure on Sui.Policy4 min