MEV

The maximum profit validators can extract from Ethereum block production by reordering, including, or excluding transactions, beyond base rewards and gas fees.

What is MEV?

Maximal Extractable Value (MEV) is the additional economic value that Ethereum validators can capture by strategically manipulating the order, inclusion, or exclusion of transactions within a block, exceeding the standard block reward and gas fees paid by users. In Ethereum’s proof-of-stake system post-The Merge in 2022, validators propose blocks and thus control transaction sequencing, enabling them to exploit opportunities like arbitrage in digital asset trades. This value arises from the public mempool, where pending transactions are visible, allowing “searchers”—specialized bots—to identify and bid for profitable bundles via tools like Flashbots’ MEV Boost, which was integrated into most validators by 2023 and processes over 90% of Ethereum blocks as of 2025.

Common MEV opportunities include DEX arbitrage, where searchers profit by buying a digital asset cheaply on one exchange like Uniswap and selling higher on another like Sushiswap in a single atomic transaction—for instance, a real-world example turned 1,000 ETH into 1,045 ETH via ETH/DAI pairs. Liquidations in protocols like Aave involve searchers scanning for undercollateralized loans and executing sales to claim fees, while sandwich attacks front-run user trades on DEXes by placing buy and sell orders around them, profiting from induced price slippage. NFT MEV, such as sniping low-floor buys, has seen cases like a searcher spending $7 million to acquire all available CryptoPunks at the floor price in 2022.

While MEV promotes efficiency—ensuring accurate digital asset pricing through arbitrage and protocol stability via timely liquidations—it harms users via higher slippage and gas wars that spike fees during congestion, and risks network centralization if a few validators dominate extraction. Mitigations include Proposer-Builder Separation (PBS), a 2024-2025 upgrade separating block building from proposing to democratize MEV via auctions, and encrypted mempools to hide transactions pre-inclusion. As of September 2025, MEV extraction totals around $1-2 billion annually, with ongoing research into single-slot finality and threshold encryption to further reduce negative externalities.