Maximal Extractable Value is the profit that block producers (validators or miners) can extract by strategically ordering, inserting, or censoring transactions within the blocks they produce. When you submit a transaction to a blockchain, it enters a public mempool where it waits to be included in a block. Anyone can see pending transactions before they are confirmed, creating opportunities for exploitation. Front-running is the most common form: a searcher sees a large pending trade, submits an identical trade with a higher gas fee to execute first, profits from the price movement, then lets the original trade complete at a worse price. Sandwich attacks bracket a target transaction with buys before and sells after. Liquidation MEV captures profit from liquidating undercollateralized DeFi loans. MEV is extracted by specialized bots called searchers who scan the mempool and compete to execute profitable strategies. The total MEV extracted on Ethereum runs into hundreds of millions of dollars annually. MEV represents an invisible tax on ordinary users. Solutions like Flashbots attempt to make MEV extraction more transparent and less harmful to the network.
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