💰 What Is MEV in Crypto?

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Today, we’re learning about Maximal Extractable Value. Let’s dive in!

TODAY’S LESSON

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What Is MEV in Crypto?

Imagine you’re bidding on a rare sneaker drop online. You click buy, but before your order goes through, someone jumps ahead, pays extra, and snags them first. In crypto, this happens all the time—it’s called MEV, or Maximal Extractable Value.

MEV is the profit made by reordering, inserting, or censoring transactions in a block before it’s finalized. When you submit a transaction, it sits in the mempool, where validators decide which to include. Those with higher fees usually get picked first, but there’s a hidden game happening behind the scenes.

Some validators and bots monitor the mempool for profitable opportunities. If they see a big buy order, they can buy first, push up the price, then sell for a profit. This is a “sandwich attack.” Other MEV tactics include front-running (jumping the line) and back-running (trading after a price move).

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While not illegal, MEV can create problems, making trades more expensive or even failing them. Some argue MEV makes markets more efficient, while others see it as unfair, benefiting insiders at the expense of regular users.

To combat MEV, projects like Flashbots aim to make transaction ordering fairer, and some blockchains experiment with MEV-resistant designs. Users can also use private transaction services to avoid detection by bots.

At its core, MEV is a battle over who profits from transactions—traders, validators, or the broader community. It’s an evolving challenge, and new solutions are constantly emerging.

So next time you make a crypto trade, remember—there’s more happening than meets the eye, and MEV players are always looking for an edge.

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