Crypto glossary
What is MEV? Value extracted from transaction ordering
KriptoMeta Editorial Team
- Added:
MEV, or maximal extractable value, is additional value available through including, excluding or reordering transactions during block production. It refers to opportunities beyond the standard block reward and transaction fees.
The actor finding an opportunity need not be the actor constructing the block. Arbitrage can narrow price differences; sandwiching places trades around another user's swap to exploit the resulting price movement. A poor fill alone is not evidence of MEV. Thin liquidity and a trade's own price impact can also reduce the amount received.
Example
Alex is waiting to buy a token from a pool. An earlier purchase pushes its price higher, so Alex receives 9.6 tokens instead of the initially quoted 10. If the earlier buyer sells after Alex's transaction to capture the change, the sequence forms a sandwich pattern. The smaller receipt alone does not prove an attack; ordering and related transfers must also be examined.
A minimum-output constraint limits acceptable deterioration without promising free or certain execution. Private routing and batch-based trading address different risks, so their protection claims should be compared by mechanism.
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