MEV (Maximal Extractable Value)
The invisible tax bots extract by controlling transaction order
Definition
Maximal Extractable Value (MEV) — formerly called Miner Extractable Value — is the profit that can be extracted from a blockchain block by reordering, including, or excluding transactions. Validators/miners can front-run trades, perform sandwich attacks, or arbitrage price discrepancies by controlling transaction ordering. MEV is considered a hidden tax on regular DeFi users and has become a multi-billion dollar industry of specialized bots and builders.
Example
A DeFi trader submits a transaction to buy $100,000 of ETH on Uniswap at the current price of $3,000. An MEV bot detects this in the mempool, front-runs it by buying ETH first (pushing price to $3,010), lets the original trade execute at a worse price, then immediately sells at $3,010. The bot profits from the price difference — at the DeFi user's expense.
Related Terms
Frequently Asked Question
What is MEV?
MEV is profit extracted by reordering blockchain transactions. Bots front-run large trades, sandwich ordinary users, or arbitrage price gaps. It is essentially a hidden tax on DeFi users, worth billions annually.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.