Maximal Extractable Value (MEV) is the profit that can be extracted from blockchain users by reordering, including, or excluding transactions in a block.
How MEV Works
| Step | What Happens |
|---|
| 1 | Users submit transactions to the mempool |
| 2 | Block proposer (validator/miner) sees pending transactions |
| 3 | Proposer reorders or inserts their own transactions |
| 4 | Profit is extracted (arbitrage, liquidation, sandwich) |
Types of MEV
| Type | How It Works | Who Profits |
|---|
| DEX arbitrage | Buy low on one DEX, sell high on another | Searchers |
| Liquidation | Liquidate undercollateralised positions | Liquidators |
| Sandwich attack | Buy before user’s trade, sell after | Searchers |
| JIT liquidity | Add/remove liquidity around large trades | Searchers |
| NFT MEV | Frontrun NFT mints | Searchers |
| Multiblock MEV | Extract value across consecutive blocks | Validators |
Sandwich Attacks
| Step | Action |
|---|
| 1 | User submits a large buy order for Token A |
| 2 | Searcher buys Token A first (price rises) |
| 3 | User’s order executes at higher price |
| 4 | Searcher sells Token A at the higher price |
| 5 | User pays more, searcher profits |
Sandwich attacks are the most common form of MEV affecting retail users.
| Role | What They Do |
|---|
| Searchers | Find and submit profitable MEV bundles |
| Builders | Assemble blocks from bundles |
| Validators | Propose the most profitable blocks |
| Relays | Connect builders to validators |
MEV on Different Chains
| Chain | MEV Activity | Typical MEV |
|---|
| Ethereum | High (most mature) | $100M+/month |
| Solana | Moderate | Growing |
| BSC | High (centralised validators) | Significant |
| Arbitrum | Moderate | Lower than L1 |
| Base | Growing | Increasing |
How to Protect Yourself
| Method | How It Works | Effectiveness |
|---|
| Use a private RPC | Bypass public mempool | High |
| Set slippage tolerance low | Limits sandwich profit | Moderate |
| Use MEV-protected DEX | CowSwap, 1inch Fusion | High |
| Use limit orders | Set price, wait for fill | Very high |
| Flashbots Protect | Private mempool | High |
Is MEV Good or Bad?
| Argument | For MEV | Against MEV |
|---|
| Efficiency | Arbitrage keeps prices consistent | Users pay more |
| Security | Liquidations maintain protocol solvency | Sandwich attacks harm users |
| Fairness | Anyone can search for MEV | Validators centralise profit |
| Innovation | Drives block building competition | Users need protection |
The Future of MEV
| Trend | What’s Changing |
|---|
| MEV-Burn | Ethereum EIP-1559-like mechanism to burn MEV |
| Order-flow auctions | Users sell their transaction flow |
| PBS (Proposer-Builder Separation) | Reduces validator MEV |
| SUAVE | Specialised MEV chain |
Bottom Line
MEV is the profit from reordering blockchain transactions. Sandwich attacks are the most common form affecting retail users — you pay more for trades. Use private RPCs, MEV-protected DEXs, or low slippage to protect yourself. MEV is a major topic in crypto and drives significant economic activity on Ethereum.
This content is for educational purposes only. Not financial advice. Do your own research before investing.