Maximum extractable value (MEV) is value that block producers or searchers can extract by including, reordering, or excluding transactions within a block. Originally called miner-extractable value in the proof-of-work era, MEV is now a constant background presence in every major blockchain.
Common MEV types: - **Arbitrage** — price differences across DEXes are captured by searchers who buy low on one and sell high on another in a single transaction. Healthy for markets; transparent. - **Sandwich attacks** — a searcher sees a pending swap, front-runs it (pushing the price against the victim), lets the victim's swap execute at the worse price, then back-runs to close the position. Extracts value directly from the victim. - **Liquidation MEV** — in lending protocols, liquidators race to repay bad debt positions and claim the collateral discount. - **JIT liquidity** — LPs provide liquidity milliseconds before a large swap and withdraw immediately after, capturing fees without real exposure.
Mitigation: - **MEV-protected RPCs** (Flashbots Protect, MEV Blocker): send transactions through private mempools that prevent sandwich attacks. Free for end-users. - **Tight slippage tolerances** (default 0.5% on Uniswap): limit the damage from sandwich attacks. - **Batch auctions** (CowSwap, 1inch Fusion): settle multiple trades at a uniform price, eliminating sandwich opportunities.
MEV is estimated at $300-500M extracted annually on Ethereum alone. Protecting against it is a default setting in most modern wallets.