Maximal Extractable Value

What is MEV ?

Maximal Extractable Value(MEV) is profit extracted by validators who reorder, include, or exclude transactions within a block often at the expense of regular users through front-running or sandwich attacks.

How does MEV work?

Bots scan the mempool for profitable opportunities. When found, they submit transactions with higher fees to cut in line.

In a sandwich attack, a bot places trades before and after a user's swap to profit from the price movement.

Why does MEV matter?

MEV raises costs and degrades execution for regular users. While it provides useful arbitrage to keep DEX prices efficient, excessive extraction centralizes power among sophisticated actors.

Key features of MEV

• Extracted through transaction reordering
• Manifests as front-running, back-running, sandwich attacks
• Requires mempool monitoring
• Flashbots and private RPCs reduce public MEV

Examples of MEV

A bot spots a large Uniswap swap and front-runs it for profit. Validators prioritize Aave liquidations to claim the liquidation bonus.

Flashbots lets searchers submit MEV bundles directly to validators, reducing mempool spam.