MEV, short for maximal extractable value, refers to the extra value that can be captured by whoever decides the order of transactions in a block. Because the arranger can choose which transactions go first, they can sometimes profit by rearranging, inserting, or leaving out certain transactions.
A common example involves spotting a pending trade and placing one own transaction just before it to benefit from the resulting price movement. This can effectively cost ordinary users money, for instance by worsening the price they receive on a decentralized exchange.
MEV is an advanced topic, but it matters because it affects everyday DeFi users indirectly. It helps explain why some trades suffer unexpected slippage and why tools exist to reduce this exposure. Understanding it adds context to how transaction ordering can influence outcomes on a blockchain.
Frequently Asked Questions
How does MEV affect ordinary users?
It can worsen the price you get on a trade, for example when someone places a transaction just before yours to benefit from the price movement, effectively costing you value.
Why does transaction ordering create MEV?
Whoever arranges transactions in a block can choose their order. That control allows them to rearrange, insert, or exclude transactions in ways that can capture extra value.
