MEV Vulnerability
The susceptibility of DeFi protocols to value extraction by miners or validators through transaction reordering or insertion.
What is MEV Vulnerability?
Maximal Extractable Value (MEV) vulnerabilities allow searchers to profit by front-running trades, as in sandwich attacks where bots insert orders around a large swap, extracting $1.3 billion in losses by 2025. In AMMs, public mempools expose orders, enabling arbitrage MEV that closes price gaps but harms users.
Common attacks include frontrunning DEX swaps, with over $1 billion extracted annually, mitigated by private relays or designs like Dutch auctions.
ESMA reports arbitrage MEV aids efficiency across DEXs, but toxic forms like censorship require protocol fixes.
Related Terms
Ethereum Foundation
A non-profit organization dedicated to supporting the development and ecosystem of the Ethereum blockchain without controlling it.
APR (Lending)
The annualized percentage rate of interest earned or paid in DeFi lending, excluding compounding.
Basis Point
A unit of measure equal to one-hundredth of a percentage point (0.01%), used to express changes in interest rates, yields, or spreads in finance.
DAO
A blockchain-based organization governed by smart contracts and member voting, eliminating centralized control.
Stablecoin
Stablecoin is designed to maintain stable value by pegging to fiat currencies, commodities, or algorithms to minimize volatility.
BitPay
A digital asset payment processor enabling merchants to accept stablecoins like USDC and USDT, with stablecoins comprising nearly 40% of its 2025 payment volume.