What is MEV?

Miner Extractable Value (MEV) is a concept that has gained prominence with the maturation of blockchain technologies, particularly within the Ethereum ecosystem. MEV represents the profit that miners (or validators, in the context of Proof of Stake networks) can earn through their ability to arbitrarily include, exclude, or reorder transactions within the blocks they produce. This capability can be exploited in various ways, such as front-running user transactions or capturing arbitrage opportunities before they become available to the public market.

For instance, if a miner notices a large trade about to be executed on a decentralized exchange, they could, in theory, place their own order ahead of the large trade, benefiting from the price movement that will occur once the large trade is executed. This practice not only undermines fairness but also erodes trust in the decentralized ecosystem, as it allows miners to profit at the expense of regular users.