What Is MEV (Maximal Extractable Value)?

About $12,000 of Uniswap liquidity tokens were sitting in the wrong place in August 2020. Someone had sent them straight into a trading pool's own contract, where anybody who called the right function could take them, so Dan Robinson and Georgios Konstantopoulos, with a colleague, tried to get them back to the owner before a bot found them.

They hid the rescue inside two contracts: both transactions had to land in the same block, and the second one slipped into a later block instead. In the seconds it spent in the public queue of pending transactions, a bot copied the move and swept the tokens. The pair wrote the episode up on 28 August under the title "Ethereum is a Dark Forest".

That bot was hunting MEV, or maximal extractable value: whatever can be captured by deciding which transactions go into a block, in what order, and what gets slipped in around them. Educational guide, not financial advice.

Miner, then maximal

The term comes from a paper called "Flash Boys 2.0", posted on 10 April 2019 by Philip Daian and seven co-authors. It documented bots on decentralised exchanges bidding up gas fees against each other to be first in line for profitable trades. The authors called the prize "miner extractable value", because on Ethereum at the time miners chose the order, and they argued it was a security risk for the chain itself as well as a cost to traders.

Miners have since gone. Ethereum switched to proof of stake on 15 September 2022, in the upgrade known as the Merge, and blocks are now proposed by validators. The acronym had already taken a new first word, maximal, by 2021, since the value exists whoever happens to be doing the ordering.

How a sandwich works

Most people meet MEV as a worse price than they expected, and the commonest version is the sandwich.

A pending swap on a decentralised exchange waits in the public mempool, where anyone can read it. A bot spots a large buy and places its own buy of the same token just ahead of it, which pushes the price up. The victim's swap then fills at that higher price. Straight afterwards the bot sells into the price the victim's purchase has lifted, and all three transactions sit together in one block, with the victim in the middle.

The only brake is the victim's slippage limit, the worst price the swap will accept. A loose limit gives the bot room to take everything up to it.

On 12 March 2025, that limit was effectively missing. Someone sent about 220,800 USDC into a Uniswap v3 pool to swap for USDT, two stablecoins that each aim to hold a value of one dollar, and got back roughly 5,270 USDT. The transaction shows that its minimum output and its price limit were both set to zero, so the swap would accept any rate. The bot's front-run traded 18.65 million USDC for 17.58 million USDT and dragged the pool's rate far out of line. The victim's swap filled at that rate, and the bot unwound its position straight after.

Cointelegraph put the gap at more than $215,000. Most of it did not stay with the bot: according to the same report, around $200,000 went on as a payment to the builder of that block.

Not all MEV hurts users

Some of it does useful work, and arbitrage is the clearest case. When a token trades at one price on one exchange and a different price on another, a searcher buys on the cheaper venue and sells on the dearer one, often inside a single transaction, and the two prices move back together.

The same logic runs straight after a big trade. A large swap knocks one pool's price out of line with everywhere else, and a bot trading the other way straight after it in the same block, known as back-running, pulls it back. The trader's swap has already filled by then, so the bot's trade does not change their price.

Who builds Ethereum's blocks now

In November 2020 a research group called Flashbots described itself publicly as an organisation formed to reduce the harm MEV was doing. Its system let bots hand their transactions privately to miners instead of fighting over them in the open by bidding up fees.

Its proof-of-stake successor, MEV-Boost, went live with the Merge. Validators who run it mostly stop assembling their own blocks. Specialised builders put blocks together and bid for inclusion, relays pass those bids along, and the validator proposing that slot takes the highest. So value passes along: bots pay builders for the placement they want, and the winning builder's bid goes to the validator proposing the block.

Adoption was fast. Flashbots' own review a year after the Merge said half of validators ran MEV-Boost within the first month and 90% by the end of the second. A study by Burak Öz and three co-authors, published in July 2024, put the MEV-Boost auction's share at about 90% of all Ethereum blocks. Between October 2023 and March 2024, it found, just three builders produced 80% of those.

The next step is to write the split into Ethereum itself. EIP-7732, "Enshrined Proposer-Builder Separation", would make builders an official role in the protocol rather than an add-on that validators choose to run. As of October 2026, it is listed as scheduled for inclusion in an upgrade named Glamsterdam, and the proposal has reached its last review stage.

Making a swap a poorer target

Nothing switches MEV off. The March 2025 swap does show where the bot's room came from, though: a minimum output of zero meant any price would do. A slippage limit set close to the quote takes most of that room away, because the bot can only push the price as far as the limit allows before the swap in the middle refuses to fill, and a sandwich without its middle is worthless to the bot.

Visibility is the other lever. Some wallets now send swaps privately to block builders instead of posting them to the public mempool, and a bot cannot get in front of a trade it never sees. Size counts as well, since a big swap moves a pool's price further than a small one, so splitting it into several pieces leaves less to squeeze from each.

Then read the quote before confirming. A stablecoin swap promising cents on the dollar is the warning sign, and nothing in the protocol will stop it filling, because the order of a block is its producer's to decide, and MEV is what that decision is worth.