MEV

MEV, or maximal extractable value, is the extra value that can be gained from controlling the order of transactions in a blockchain block. In decentralized finance, many transactions depend on timing, such as swaps, liquidations, and arbitrage trades. Validators, block builders, or specialized bots may profit by placing their own transactions before or after others, reordering pending transactions, or sometimes leaving transactions out. The term originally meant miner extractable value, but it is now used more broadly across proof-of-stake and other systems.

MEV matters because it can affect trading costs, transaction fairness, and network incentives. A common example is a sandwich attack: a bot sees a large token swap waiting to be processed, buys the token first, lets the user’s swap push the price up, then sells for a profit. This can leave the user with a worse price. Not all MEV is harmful; arbitrage between decentralized exchanges can help keep prices aligned, and liquidations can help lending protocols stay solvent. Still, MEV is an important design challenge because it shows that transaction ordering has economic value, not just technical importance.