What is MEV (Miner Extractable Value)?

MEV (Maximal Extractable Value, previously Miner Extractable Value) is the profit that block proposers (validators post-Merge) can extract by reordering, inserting, or censoring transactions within the blocks they produce. MEV exists because proposers have complete control over transaction ordering within their block. MEV strategies: (1) Arbitrage — inserting a transaction between two transactions that create a price discrepancy across DEXes; (2) Sandwich attacks — detecting a large swap in the mempool, front-running it (buying the asset first), then back-running it (selling after the price moved). Harmful to retail users; (3) Liquidations — racing to liquidate undercollateralized positions first to earn liquidation bonuses; (4) JIT (Just-In-Time) liquidity — adding liquidity just before a large trade and removing immediately after to capture fees. MEV ecosystem: MEV-Boost (Ethereum) separates the role of block building from proposing — specialized "searchers" find MEV opportunities, "builders" aggregate them into profitable blocks, "proposers" pick the highest bid. Flashbots created this ecosystem to make MEV more transparent and fair. MEV totals hundreds of millions of dollars annually on Ethereum.