What Is MEV (Maximal Extractable Value)?
Also known as: Maximal Extractable Value, Miner Extractable Value, MEV
In short
MEV (maximal extractable value) is the additional profit that block producers, or bots working with them, can earn beyond the standard block reward and fees by using their power to order, include or exclude transactions in a block.
The concept first emerged in the Proof of Work era under the name Miner Extractable Value; with Ethereum's move to Proof of Stake, it was renamed Maximal Extractable Value to cover all block producers. MEV opportunities arise from transactions pending in the publicly visible mempool. The best-known examples are arbitrage trades that close price gaps between decentralized exchanges, liquidations in DeFi protocols, and sandwich attacks carried out by placing transactions before and after a large buy order.
While part of MEV serves functions such as equalizing prices across markets, sandwich attacks and front-running work directly against users; the user trades at a worse price than they expected. On Ethereum, with tools such as MEV-Boost, block building has been delegated to specialized block builders, and validators choose the most profitable block offered to them; this approach is known as proposer-builder separation (PBS).
Users can try to protect themselves from some types of MEV by sending their transactions through private relay channels or keeping their slippage tolerance low. MEV's tendency to concentrate block production in a few large players is an important research topic for the network's decentralization and censorship resistance.
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