What is MEV?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
MEV is the value extractable by whoever decides the order of transactions in a block. From a user's side it shows up as being front-run and filled at a worse price — an invisible cost of trading on a DEX.
Key points
- Value captured through control of transaction ordering
- Sandwich attacks fill users at worse prices
- Wide slippage tolerance makes you a better target
- Private transaction routing can mitigate it
Definition
The additional value that block producers and related parties can capture by choosing which transactions to include, in what order.
Transactions are not executed the instant they are sent; they sit in a public waiting area before inclusion. Because their contents are visible there, a third party can insert their own transaction ahead of yours, and block producers have discretion to prioritise higher-fee transactions.
The classic form is the sandwich attack. Spotting a sizeable DEX buy order, an attacker buys the same asset just before it to push the price up, lets the victim fill at the worse price, and sells immediately after. The difference is their profit and your loss.
Mitigations include not widening slippage tolerance beyond what you need, and using wallets or RPC endpoints that submit transactions privately to block producers rather than to the public pool. Neither eliminates MEV; they reduce exposure to it.
Watch out for
- · A generous slippage setting is literally the budget an attacker can take
- · Thin liquidity makes even modest trades worth attacking
- · Services advertising MEV protection differ in what they actually do