MEV 101: A Glimpse into MEV, The Magic of Manipulating Time

LBank Labs
21 min readSep 13


Author: LBank Labs Research team — Jijiji

Bob’s Midnight Mystery: The Curious Case of the Sneaky Trade 🌙

In the quiet of the night, in the 24/7 world of Crypto, our friend Bob was pondering over what just happened. Why was the purchase price of the order he submitted on Uniswap significantly higher than what was displayed? Upon closer inspection of the transaction, he noticed an address that almost simultaneously purchased the same token just before he did and immediately sold it after his transaction was completed. Out of curiosity, Bob clicked on this address and found out it was a contract address that consistently bought and sold quickly around other people’s purchases. Bob was utterly baffled. He retraced his steps: copying the contract, opening Uniswap, entering the contract, setting the slippage, and clicking the transaction. Everything seemed flawless. Seeking clarity, he turned to his degen friend, Alice. After a quick glance, Alice chuckled and said, “Bro, you got sandwiched.” Bob was perplexed. And so, Alice began to explain, “It’s all about MEV…”

What is MEV?

MEV, the bane of beginners, the follower of the grassroots, the PVP on-chain, the dark forest… This long list of nicknames, longer than Daenerys Targaryen’s, refers to its ability to “alter the inclusion & order of transactions in a block to extract value beyond the standard block rewards and gas fees.” At its core, the mechanism revolves around “altering the order of transactions in a block.” Hence, with the shift from PoW to PoS in recent years, its full name has evolved from “Miner Extractable Value” to “Maximal Extractable Value.” After all, during the PoW era, only miners could control the order of transactions within a block. However, as the MEV industry matured and Ethereum transitioned to PoS, the division of labor in the MEV supply chain became more refined, shifting the focus from Miners to participants up and down the chain. Consequently, the concept represented by “M” transitioned from Miner to Maximal.

MEV Roles and Responsibilities

Before diving into the specifics of MEV roles, it’s essential to understand the process and principles behind MEV. To grasp the concept of MEV, one must first understand how a transaction is completed.

Taking Ethereum as an example, here’s how an on-chain transaction is executed:

  1. Users create & sign transactions using their private keys (via wallets or libraries, essentially sending requests to JSON-RPC).
  2. Ethereum clients verify the transaction’s validity (checking if the balance is sufficient, if the signature is correct).
  3. If the transaction is valid, the client responsible for executing the transaction adds it to the local memory pool and broadcasts it to other nodes. Other nodes, upon receiving the broadcast, also add the transaction to their memory pools.
  4. Next, a block is constructed. This task is “randomly” assigned to a system-selected node from the validator group. The chosen node (Miner) is responsible for building the on-chain block and updating the global state. The node’s consensus client then generates the corresponding beacon block and broadcasts it to other nodes via the consensus network.
  5. Other nodes, upon receiving the beacon block, verify its validity and vote on whether it’s the logical next block. Once it receives votes from over 66% of the total staked ETH, it achieves finality.
+------------------+     +------------------+     +------------------+
| User | | Validator | | Miner |
+------------------+ +------------------+ +------------------+
| | |
| Creates & signs txn | |
|----------------------->| |
| | |
| | Submits txn to Execution Client
| |----------------------+
| | |
| | |
| | v
| | +------------------+
| | | Execution Client|
| | +------------------+
| | |
| | Validates txn & adds to mempool
| | |
| | v
| | +------------------+
| | | Consensus Client|
| | +------------------+
| | |
| | Passes txn to Miner |
| |---------------------->|
| | |
| | | Creates new beacon block
| | |
| | v
| | +------------------+
| | | Validator Client|
| | +------------------+
| | |
| | Validates & broadcasts new block
| | |
|<----------------------| |
| Transaction confirmed | |
| | |


From the block construction process, we can see that it involves the power to “manipulate transaction order & inclusion.” There’s a saying, “When there’s an opportunity to profit from wrongdoing without constraints, people will do wrong.” If we consider manipulating transaction order as “wrongdoing,” then nodes will definitely exploit this power for their gain. So, the question now is, how do nodes sort transactions to maximize their profits? You might think of two strategies:

  1. Directly engage in MEV. If a node is aware of an MEV arbitrage opportunity and happens to be the block producer, it can prioritize its low-cost arbitrage transaction, capturing almost 100% of the profit. The downside is the need for specialized programs for each type of MEV, and even modifications for different projects. However, nodes can simply run general frontrunning bots, calculate if a transaction is profitable, and if so, engage in arbitrage. If the profit is enticing enough, they might even employ time-bandit attacks.
  2. Rent out their sorting power. Let others pay to use their block space. This involves the broadcasting process mentioned earlier. All transactions are sent to a public memory pool, meaning everyone can see them. Nodes then prioritize transactions based on a priority gas auction (PGA). In other words, the higher the gas paid, the higher the transaction’s priority. This means others can submit their MEV transactions for arbitrage. This led to the emergence of a group dedicated to finding MEV opportunities — the Searchers.


Searchers run sophisticated algorithms to detect MEV arbitrage opportunities and automatically submit these transactions to the network. Since there are many searchers, and many may target the same arbitrage opportunity, they need to participate in the Priority Gas Auction (PGA), or what we meme-ly call the “gas war”. The more intense the competition for an arbitrage opportunity, the more the searcher pays, sometimes giving up to 90% or more of the profit to the miner. Therefore, the core competitiveness of a searcher, besides finding MEV opportunities, is to optimize their gas usage strategy as much as possible.

It’s worth noting that due to the limitations of regular EOA (Externally Owned Account) accounts, which can only send one transaction at a time, MEV arbitrage transactions are executed by smart contracts deployed by the arbitrageurs. This involves gas golfing, a common technique for optimizing smart contracts to reduce gas costs. Without diving too deep, just know that it’s related to storage, which is very expensive on blockchain, leading to various tricks to reduce gas costs.

Apart from the usual optimization techniques like choosing the right data type (e.g., uint256 to uint8) and optimizing loop logic (e.g., i++ to ++i), in the MEV world, there are other tricks like using addresses that start with a long string of zeros (e.g., 0x0000000000C5218…). This is because they require less space and gas for storage. Another trick is to maintain a small balance in their contracts of as many ERC20 tokens as possible to avoid the cost of initializing storage slots, which is much more expensive than updating them.

However, directly participating in on-chain PGA means that, except for the winner, all transactions submitted by other searchers will be canceled. This results in wasted block space and higher gas fees, creating a strong negative externality. Moreover, directly sending transactions to the chain means that miners can easily copy a searcher’s transaction and take all the profit. Therefore, for most searchers, using mature services like Flashbots, Blocknative, or Bloxroute becomes crucial. The main benefits of these services for searchers are:

  • Moving the PGA off-chain, ensuring they only pay gas fees when their full transaction is executed.
  • Reducing the likelihood of miners front-running their arbitrage opportunities.
  • Protecting miners from potential threats like DDoS attacks (a flood of junk transactions with no additional fees, forcing miners to expand computational resources).

Of course, other projects or users can also use these service providers to prevent their transactions from being arbitraged, but that’s beyond the scope of this article. With the addition of searchers, a complete MEV transaction process looks like this:

  1. Transactions are broadcast to the public mem pool.
  2. Searchers detect the transaction, calculate the gas fee, build a transaction package containing their arbitrage transaction (if using services like Flashbots, this is where they build their bundle), and send the transaction package via a contract.
  3. They participate in the gas bribery auction (either on-chain or off-chain).
  4. Their transaction package is executed, they pay the gas, and profit.

MEV’s Essence

So, diving deep into the rabbit hole, we realize that the core principle of MEV is pretty straightforward. It’s all about manipulating transaction order using gas as the magic wand, ensuring transactions execute in a way that’s profitable for the sorcerer, rather than chronologically. If we zoom out and look at the bigger picture, MEV is essentially the OG “price discrimination” we see in the real world.

  • Disney’s FastPass: Pay more to skip the line and get on that rollercoaster before everyone else.
  • Airline Seat Selection: Splash some extra cash to secure that window seat with extra legroom.
  • Ticket Scalpers: We all know these guys, flipping tickets for a profit.

But here’s the kicker: In the crypto realm, MEV opportunities are more transparent and, dare I say, fairer than these real-world examples. The trustless nature of blockchain ensures a level playing field, where the only variable is time. MEV breaks this time constraint by manipulating transaction order, allowing Searchers & Miners to reap the rewards. But, fear not! This doesn’t mean the blockchain loses its “trustless” charm. It’s all part of the blockchain economy. Different folks value block space differently, hence the varying gas prices and the birth of MEV. The fairness lies in the fact that it’s all about the moolah, without any other biases. Plus, anyone can join the MEV party, with services like Flashbots making it easier for the average Joe to profit or protect their transactions.

However, it’s essential to note that not all MEV opportunities are created equal. Some involve off-chain trust issues. For instance, even with services like Flashbots, searchers have to trust that miners won’t front-run their transactions. And we know the root of the “unfairness” in MEV lies in the power to determine the order of block transactions. Ethereum’s current system, where nodes both order and execute transactions, is like having a referee who can suddenly join the game as a player. The Ethereum community’s proposed PBS, which separates the roles of block builder and proposer, might be a game-changer in this regard.

Alright, enough of the theory. Let’s dive into the different flavors of MEV through some juicy examples.

MEV Types — A Quick Overview

There are various ways to slice and dice MEV. Some categorize it by arbitrage methods (cross-DEX/chain/layer arbitrage, sandwich, liquidation, NFT MEV, Rebase arbitrage, JIT, etc.), while others look at its impact (beneficial vs. harmful). But today, we’re focusing on the methods.

Looking at the data from Flashbots’ MEV explore, most MEV is all about that sweet, sweet arbitrage, with liquidations being the side dish. Most of the action happens on DEXs, with Uniswap being the main battleground for MEV bots.


Diving deeper into the data, we see that sandwich attacks dominate the MEV scene. It’s like the “Hello World” of MEV for many. But when it comes to profits, neutral or even beneficial strategies like cross-DEX arbitrage take the cake. The MEV landscape is very much a “winner-takes-all” scenario, with a few top bots gobbling up most of the profits.

*MEV transactions on Ethereum in the past month, source:

In short, while MEV opportunities are frequent, the profit per transaction is often peanuts. Only a few with the right mix of luck and strategy hit the jackpot.

Now, let’s break down some common types of MEV.

DEX Arbitrage(Backrunning): The Art of the Perfect Timing

Imagine our buddy Bob from the beginning, right? He’s trying to flex with a cool $10,000 on Uniswap to grab some of that spicy Token A. Now, in a world where everything is sunshine and rainbows, Bob’s trade would go down like this:

Bob thinking he’s making big moves.

T5 is Bob’s big move. The chosen node, being the cool DJ of the crypto party, picks out the hottest tracks (transactions) from the mem pool, ranking them by their gas vibes, and then drops that sick beacon block.

But wait, there’s a twist! In the crypto jungle, there’s always someone lurking in the shadows, waiting for the perfect moment to jump in. Enter the Arbitrageur, the ultimate opportunist. This sneaky player sees Bob’s trade and thinks, “Why not make a quick buck?” So, before Bob’s trade even hits the dance floor, the Arbitrageur swoops in, buying Token A and driving up the price. Once Bob’s trade finally goes through, the price is higher than he expected. And just like that, before Bob can even blink, the Arbitrageur sells off Token A, pocketing the difference. Ouch!

T6 is the batch transactions of Arbitrager : )

This, my friends, is the classic DEX Arbitrage move. It’s like that scene in Fast & Furious where one car overtakes another just before the finish line. Except here, the cars are trades, and the finish line is the blockchain.

Wait! you’re wondering how these bots pull off their sneaky moves, huh? Well, many of these bots are like the Swiss Army knives of the crypto realm. They’re generalists, keeping an eye on multiple DEX pools, always ready to pounce when they spot a juicy arbitrage opportunity. And then, of course, there are those specialized bots, laser-focused on a specific token, waiting for their moment to shine.

DEX Arbitrage Bots: The Ninjas of the Crypto World 🥷. source: flashbots example

Alright, crypto fam, here’s the tea: this type of arbitrage is all about backrunning. The game plan for these Searchers? They gotta make sure they’re the first in line when buying low and selling high, but — and here’s the kicker — they gotta wait for our main man Bob to complete his transaction first. It’s like waiting for the perfect wave to surf. 🏄

The beauty of this? Bob’s trade remains untouched. And not just that, these sneaky moves help keep prices across different pools in sync, boosting the overall efficiency of DeFi trades. It’s like having a DJ perfectly syncing the beats at a rave.

This arena is where the MEV gladiators battle it out, with the fiercest competition. But here’s the cool part: it’s mostly a pure PvP (Player vs. Player) domain for arbitrageurs. The average Joe in the crypto world? They’re just chilling, unaffected by this high-octane drama. Backrunning: The Art of the Perfect Timing ⏳!

Frontrunning: The Sneak Attack of the Crypto Jungle 🐆

Alright, crypto fam, now that we’ve dived deep into the world of backrunning, let’s flip the script and talk about its mischievous twin: frontrunning. If backrunning is like waiting for the perfect wave to surf, frontrunning is like catching the wave before anyone else even sees it coming.

Do you remember when CryptoKitties were the hottest thing in town? 🐱💎

Imagine this: You’ve spotted the purrfect CryptoKitty, with those dazzling emerald eyes and that rare neon fur. You’re ready to make your move and adopt this digital feline. You’ve set your price, and you’re about to seal the deal.

But hold up! Just as you’re about to swipe that kitty into your collection, someone else swoops in, offering a slightly higher price, and snags it right from under your nose. Oof! That stings, doesn’t it?

Thank you boy : )

In the wild world of blockchain, your transaction to buy that CryptoKitty first goes into the mempool, a sort of waiting room where it hangs out with other pending transactions. And guess what? Everyone can see it there, including those sneaky frontrunners. They spot your bid, quickly place a higher one with a juicier gas fee, and boom! Their transaction gets processed before yours, and they walk away with the prize.

Now, speaking of frontrunning, who could forget the recent drama between Curve and the white-hat hackers? A true tale of crypto love and hate. We won’t dive deep into the specifics here, but for those of you who are curious, the internet is filled with detailed breakdowns of the whole saga. Dive in if you dare!

c0ffebabe&Curve : ) . source:

It’s like being at an auction, and just as the hammer is about to drop, someone shouts a higher bid. Only here, it’s all happening at the speed of light, with bots playing the bidding game.

But here’s the twist: while backrunning is like waiting for the perfect wave to surf, frontrunning is like cutting the line to catch that wave first. It’s a mad dash, a race against time, and in this game, the fastest and the sneakiest take the crown.

So, next time you’re eyeing that rare digital collectible or that juicy trading opportunity, remember: in the crypto jungle, it’s not just about being fast; it’s about being the fastest. 🚀🔥

Sandwich Attack: When You’re the Tasty Filling in a Crypto Sandwich 🥪

It’s time to dive deep into the world of MEV and unwrap the infamous Sandwich Attack. It’s like making a sandwich, but instead of bread and fillings, we’ve got buy and sell orders. And guess who’s caught in the middle? Yep, it’s our main man, Bob.

The Deets

Imagine Bob, just trying to make a chill trade on Uniswap. But, plot twist! Before he knows it, he’s sandwiched between a buy order and a sell order. It’s like a mix of frontrunning and backrunning, all in one tasty package. Now, remember that detail about Bob setting a high slippage, like 5%? If you’ve ever peeked at Uniswap or other AMM DEXs before confirming a trade, you’ve seen that “Minimum received” value. That’s the difference between what Bob should’ve gotten and what he actually gets. And that, my friends, is where the Sandwich Bot feasts.

source: Uniswap

The Play-by-Play

  1. Bob’s trade is chilling in the mempool, just waiting for its moment.
  2. Sandwich Bot spots it and thinks, “Lunchtime!” 🍽️
  3. The bot places a buy order, driving the price up.
  4. Bob’s trade goes through, but now he’s paying more.
  5. Sandwich Bot sells immediately after, cashing in on the difference. Easy money! 💸
In the image, t6 is the frontrunning buy order in the sandwich, while t7 is the backrunning sell order following Bob’s trade. Suppose Bob’s $10,000 could initially buy 1,000 of Token A, with an average transaction price of $1,000. But because the searcher placed a frontrunning buy order, buying some of Token A before Bob, the quantity of Token A in the pool decreases, raising its price. Bob’s final average transaction price becomes $2,000, and he only gets 5 of Token A. The searcher then sells the Token A they bought at a lower price back to the pool through t7, making a profit of almost $5,000.

Now, here’s the kicker: while the Sandwich Bot is making bank, Bob is taking a hit. And the real burn? The loss Bob faces is often more significant than the profit the Sandwich Bot makes.


The Bot’s Blueprint: The Notorious Sandwich Bot 🤖

Alright, crypto fam, let’s spill the beans on why the Sandwich Attack is so darn infamous. It’s not just the money they snatch; it’s the negative externalities they bring to the table. These bots are notorious for their sneaky tactics, and they’ve earned their bad rep.

Now, imagine you’re trying to deploy a simple bot, one that’s got its eyes set on the Uniswap v2 ETH/USDC pool. In theory, this bot would roll out something like this:

  1. Read transactions from the mempool. The cost-effective way? Use APIs like Flashbots. But if you’ve got your own node, even better.
  2. Decode the transaction and check if it’s the pool you’re targeting. Here’s a quick checklist:

a. Make sure the transaction hasn’t been mined and isn’t empty.

b. Check if the contract involved is the Uniswap v2 router.

c. Use something like abiDecoder to see if the method name is “swapExactETHForTokens” and verify the pool’s address.

3. Calculate if there’s profit to be made, considering gas costs. This is where the magic happens, folks.

4. If it’s profitable, build your transaction bundle. Pro tip: You’ll need your own transaction contract, and if you’re using Flashbots, a FlashQuery contract.

5. Send the transaction, but double-check if the target transaction is still valid.

6. Check the results and print those logs. If you’re using a terminal, it might look something like this:

Now, this is just a rough outline. If you’re thinking of building your own bot, there’s a lot more to consider. Like how to avoid toxic tokens or how to optimize your gas fees. But hey, that’s a deep dive for another day.

The Dark Side of Sandwich Attacks

But here’s the thing: not all Sandwich Attacks are just about slippage. Some are way more malicious. Take the imbalance attack, for instance. It targets pools with low liquidity. Imagine a pool with just 0.00001 ETH and 100,000 ABC tokens. Bob spots it and thinks ABC’s price will rise. He sends a trade to exchange 1 ETH for ABC. But a searcher sees this and launches an imbalance attack. Here’s how it goes down:

  1. The searcher places a buy order before Bob’s trade, draining the pool of ABC with a massive amount of ETH.
  2. Bob’s trade goes through, but he gets almost no ABC.
  3. The searcher places a sell order after Bob’s trade, cashing in on Bob’s 1 ETH.

It’s brutal. Bob loses his initial investment and gets almost nothing in return. These bots are nasty, and it’s a reminder to be careful, especially with low liquidity tokens. And always, always use private RPCs for trades.

The Final Word

And just so you know, Sandwich Attacks aren’t just for ERC-20 tokens. They happen with NFTs too (shoutout to blur 😉). There’s a whole menu of Sandwich Attacks out there, so always be on your guard. Because trust me, you don’t want to be the filling.

Liquidation: The DeFi Lifeguard on Duty 🏊

Diving into the MEV ocean, we find Liquidation lurking beneath. Not the biggest shark around, but it sure keeps the DeFi borrowing and leverage ecosystem afloat. Picture it as the lifeguard of the DeFi beach. When a borrower’s collateral falls short, an opportunist can jump in, snag that collateral on sale, and help the borrower settle the score.

For our bot enthusiasts, many protocols roll out the red carpet with a standard liquidation interface. Some even come equipped with bots, courtesy of the official community. Predictable profits and an easy-peasy entry? This track’s sizzling! But here’s the plot twist: it ain’t just about outbidding on gas. It’s a discount war out there. Some are chill with a 10% markdown, while others hustle for a mere 3%. Occasionally, these liquidators end up biting the dust. So, the real gains? Might not always be soaring. But with the right intel on fresh liquidation ops, you could be laughing all the way to the crypto bank.

Hold up! Some liquidators are playing dirty. They’re the rebels, stirring up the DeFi waters and even crafting liquidation scenarios on the fly. Picture a borrower getting that dreaded margin call and scrambling to add more collateral. These rogue liquidators, especially some sly miners, can jump the queue, forcing the liquidation and leaving the borrower high and dry. Savage move, right?

Rebase: The Crypto Yo-Yo 🪀

Switching gears, we zoom into Rebase, the underdog in the MEV league. It’s got its eyes on tokens with that fixed-point Rebase mojo. The game plan? Snap up the token right before or during the Rebase, and once those Rebase rewards roll in, cash out like a boss.

Enter AMPL, the rebase superstar. It’s got a daily rebase rhythm, tweaking its supply based on the current price vibes. The rebase is all about the gap between AMPL’s dream price and its market reality. And here’s the magic math:

Rebase = (((Oracle Rate — Price Target) / Price Target) * 100) / 10

So, if AMPL’s rocking a market price of $2 and aiming for $1.03, the Rebase% dances to 6.5049%. Meaning, if you snagged 10,000 AMPL pre-Rebase, post-Rebase you’re looking at 10,650.49 AMPL. Flip it, and voila! You’re 650.49 AMPL richer.

Sure, you can play this by hand. But for those one-of-a-kind rebases, you might want a script on the lookout, especially if you’re all about that quick flip life.

Just in Time: The Speedy Gonzales of MEV 🚀

According to Uniswap’s diary, from May ’21 to July ’22, JIT events in Uni v3 were like rare Pokémon, with just over 8,000 sightings. Compared to the daily 5,000+ arbitrage and sandwich fiestas, it’s a pretty chill scene. So, what’s JIT? It’s the “Just in Time” hustle. Imagine a searcher spotting a juicy swap in the mempool. To pocket those sweet, sweet fees, they slide in a liquidity injection right before the big trade and then, like a ninja, pull it out right after.

Using our buddy Bob as an example, the JIT block party would look something like this:

Beyond these MEV flavors, there are some exotic ones we won’t dive into. Like the “transaction review” suspicion, where there might be some shady dealings to extort more gas fees. The mempool’s dark secrets, amirite?

Dark Forest Dangers: When MEV Bots Become Prey 🕷️

From our journey so far, running an MEV bot seems like a golden goose, right? Auto-detect, decode, arbitrage, rinse and repeat. But here’s the tea: there’s no free lunch in the MEV jungle. Even the apex predators, our MEV bots, sometimes become the hunted. The nightmare fuel for searchers? The infamous Salmonella attack. But first, a quick biology lesson:

“Salmonella is a sneaky bacteria often linked to food poisoning. When peeps consume contaminated food or water, they might experience symptoms like diarrhea, fever, and stomach cramps. The catch? You won’t even know it’s there until it hits you.”

From this, we get Salmonella’s two signature moves:

  • Stealth mode
  • Toxic vibes

The Salmonella attack, then, is a sneaky contract that looks like your everyday ERC20 token but packs a toxic punch. If the sender is the chosen one, all’s good. If not, only 10% of the specified amount gets transferred, but the log? Oh, it shows the full amount. Sneaky, right?

function _transfer(address sender, address recipient, uint256 amount) internal virtual {
require(sender != address(0), "ERC20: transfer from the zero address");
require(recipient != address(0), "ERC20: transfer to the zero address");
uint256 senderBalance = _balances[sender];
require(senderBalance >= amount, "ERC20: transfer amount exceeds balance");
if (sender == ownerA || sender == ownerB) {
_balances[sender] = senderBalance - amount;
_balances[recipient] += amount;
} else {
_balances[sender] = senderBalance - amount;
uint256 trapAmount = (amount * 10) / 100;
_balances[recipient] += trapAmount;
emit Transfer(sender, recipient, amount);

The core logic of this function is: if the sender is the specified owner, then tokens are transferred normally; if not, only 10% of the amount is transferred, but the event log shows the full transfer amount. This design aims to deceive those trying to front run in the mempool. Source:

This sneaky contract was crafted by the MEV maestro, Nathan. His goal? School the MEV rookies that the mempool ain’t a risk-free playground. In his words: “The mempool is a fun place, but it’s not a safe place.”

After setting his trap, Nathan baited searchers with a series of decoy transactions. First catch? A whopping 68 ETH. And the hits kept coming, draining 17 bots dry. It was only when the searchers smelled something fishy and upped their game that the attack lost its edge. The takeaway? The mempool is a PvP battleground. Stay sharp, or you’re someone else’s payday.

In Conclusion: The Yin and Yang of MEV 🌗

By now, we’ve delved deep into the world of MEV, understanding its intricacies and the various forms it takes. MEV, in essence, is a neutral phenomenon. Different types of MEV serve different purposes. While all aim for profit, some forms of MEV are benign, bolstering the stability and security of DeFi, reducing risks, enhancing efficiency, and producing more positive than negative externalities. As the saying goes, “Without rational searchers identifying and addressing inefficiencies, leveraging the economic incentives of protocols, DeFi protocols and dapps might not be as robust as they are today.”

However, other forms of MEV can adversely affect the average user’s interests, necessitating measures to mitigate these losses. This is what we’ll explore in subsequent sections.

Impact on User Experience: The existence of MEV isn’t just a technical or economic issue; it directly affects the user experience. Users like Bob might become skeptical of DeFi due to their lack of understanding of MEV, potentially hindering widespread adoption of DeFi.

The Future of MEV: As more people become aware of MEV, we might witness innovations and solutions to reduce its negative implications. This could include more transparent transaction mechanisms, new protocol designs, or smarter trading strategies.

The Role of the Community: The strength of DeFi and the broader cryptocurrency community lies in its openness and collaborative nature. Only through collective efforts can we ensure that the impact of MEV is positive rather than destructive.

In essence, MEV is a strategy, a temporal magic of sorts. How it’s used and how it’s regulated depends entirely on protocol design. If designed well, MEV becomes the Most Efficient Value. If not, it could very well transform into the Most Evil Value.



What is MEV?

Flashbot Doc:

MEV — A Deep Dive, Part 1:


libevm github:

Defi Cartel:

Coin Tools: