// GLOSSARY -- DEFI

What is MEV (Maximal Extractable Value)?

1 min read Updated

Maximal Extractable Value (MEV) is the profit that block producers can extract by including, excluding, or reordering transactions within a block — a fundamental economic force in blockchain systems.

WHY IT MATTERS

MEV is the value that comes from transaction ordering power. Block producers see pending transactions and can profit by: front-running trades (buying before a large order), back-running (trading after a price-moving event), sandwiching swaps (profiting from both sides), and arbitraging price differences across DEXs.

MEV is both a feature and a bug. Arbitrage MEV improves market efficiency. Sandwich attacks extract value from users. The MEV supply chain (searchers → builders → proposers) has become a significant industry.

Flashbots and MEV-Share aim to democratize and redistribute MEV value, reducing harmful extraction while maintaining the beneficial price-correcting effects.

FREQUENTLY ASKED QUESTIONS

How much MEV is extracted?
Hundreds of millions of dollars annually on Ethereum alone. The exact amount varies with market activity. MEV-Explore and Flashbots dashboards track extraction in real-time.
How can I protect against MEV?
Use private mempools (Flashbots Protect), set tight slippage limits, use MEV-aware DEXs (CoW Protocol), and avoid large on-chain swaps during high-MEV periods.
Is MEV unique to Ethereum?
No. Any blockchain with a public mempool and transaction ordering flexibility has MEV. Solana, BSC, and other chains all have MEV extraction. The mechanisms differ by chain architecture.

FURTHER READING

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