MEV (Maximal Extractable Value)
Profit extracted by reordering, inserting or censoring transactions within blocks — an invisible tax on DeFi trading.
MEV is value captured by whoever controls transaction ordering. Because pending transactions are public in the mempool, bots can front-run large swaps, “sandwich” them (buy before, sell after — worsening the victim’s price), or snipe arbitrage and liquidations. Total extracted MEV runs into the billions.
It’s not only parasitic — arbitrage MEV keeps prices aligned — but sandwich attacks are a direct tax on users. Defenses now shape infrastructure: private transaction relays, MEV-aware DEX designs, and slippage limits (your practical protection: tight slippage settings make sandwiches unprofitable). MEV is why “who orders the block” became one of crypto’s most consequential questions.