If i’m understanding this correctly this will cause an imbalance between actual staked Eth and sETH2 in existence.
It’s correct that sETH2 supply will be less than the amount of principal in the validators, but this will be compensated by the supply of rETH2 amounting to total accrued rewards + total accrued MEV, so sum of supply of sETH2 and rETH2 is always equal to total validators’ balance.
You can think of it this scenario: whenever ETH is staked, it earns rewards. These rewards are distributed as rETH2. Now, whenever you distribute the rewards, they are distributed proportionally to one’s sETH2 holdings. Suppose MEV was distributed on the validator level (simply as ETH rewards that are not accessible ie cannot be immediately reinvested) - we would distribute them as rETH2. No biggie.
Now since MEV is distributed on the execution layer, these ETH rewards are accessible, and all we do compared to the scenario above is also stake them on the validator level to accrue even more rewards. It’s akin to compounding, and while it’s not as straightforward as before with sETH2 and rETH2, the main logic remains the same: sETH2 is the interest-bearing token, rETH2 is not. I hope this makes sense G!