What is MEV?

MEV, originally miner extractable value and now maximal extractable value, is the profit that whoever orders transactions in a block can take by choosing that order. Because pending transactions are visible before they are included, a bot can see a large swap coming, buy ahead of it, let it move the price, and sell after: a sandwich. Arbitrage between pools and liquidation bots are the other large sources.

The mechanics start in the mempool, the waiting room of unconfirmed transactions. Searchers watch it, construct bundles of transactions that profit from what they see, and pay block builders and validators to include them in a chosen order. On Ethereum this became a formal market; on other chains it exists in cruder forms.

For a user, MEV is mostly a tax on swaps. A sandwiched trade fills at a worse price than the quote, which shows up as slippage larger than expected. Defences exist: tighter slippage limits, private transaction routing that skips the public mempool, and simply trading in sizes that are not worth attacking.

Some MEV is arguably useful, arbitrage keeps prices aligned across venues and liquidations keep lending markets solvent, and some is pure extraction. The debate matters for protocol design; for a holder the practical point is that an on-chain trade has a cost beyond the fee, and it rises with size and with how public the transaction is.

In a portfolio history MEV appears as the gap between the price you expected and the price you got. Reading fills with their actual amounts, not their quotes, is what makes that cost visible, and it is why a ledger that records real executed amounts is more honest than one that records intentions.

Wallets and aggregators increasingly offer MEV protection by default, routing swaps through private relays or batching them so that front-running is not possible. It costs nothing to turn on and it is worth checking that it is.