If you’ve spent any time around crypto lately, you’ve probably heard the term MEV. It’s one of those things that started as a niche technical concept and has sort of exploded. I think it’s worth paying attention to, even if it feels a bit abstract at first. It’s changing how value moves on blockchains, for better or worse.
What Exactly Is MEV?
MEV stands for Maximum Extractable Value. In simple terms, it’s the extra profit that can be made by strategically ordering, including, or even excluding transactions in a block. Miners used to do this, but now it’s mostly validators in proof-of-stake networks. Because there’s no central authority enforcing a strict order, the people building the blocks have some discretion. They can see pending transactions in public mempools and, well, sometimes they—or automated bots—jump in to capitalize on opportunities.
It’s a big deal financially. On Ethereum alone, over half a million ETH—that’s well over a billion dollars—has been extracted through MEV since the Merge. That’s not small change.
How It Actually Works
A lot of MEV strategies look familiar if you know traditional finance, but they play out differently on-chain. Arbitrage is a common one: bots scan for price differences between exchanges and make quick trades to profit from the gap. That can actually help align prices. But then there’s frontrunning, where someone sees a pending trade and pays a higher fee to get their transaction in first, effectively jumping the line. In traditional markets, that’s illegal. Onchain, it’s just how things work right now.
There are more aggressive tactics too, like sandwich attacks, where a bot places orders both before and after a victim’s trade to squeeze value out of the price movement. It’s profitable for the searcher, but it often leaves the regular user with a worse deal.
Why It Matters for Everyday Users
You might be wondering if this affects you. Probably, yes, even if indirectly. MEV activity can drive up network fees during busy periods. It can also lead to worse trade execution if your transaction gets caught up in these strategies. Some projects are trying to give some of that extracted value back to users, but it’s still early.
Regulators in Europe are starting to look into whether some MEV practices qualify as market manipulation. It’s a gray area. The transparency of blockchain makes these activities visible, but not necessarily fair.
So where does that leave us? MEV isn’t going away. It’s built into how many blockchains operate. The question is whether the ecosystem can develop ways to mitigate its negative effects without stifling the efficiency it sometimes brings. It’s messy, complicated, and honestly—still evolving.
