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Crypto Terms:  Letter M
Jun 19, 2023 |
updated Apr 02, 2024

What is Miner Extractable Value (MEV)?

Miner Extractable Value (MEV) Meaning:
Miner Extractable Value (MEV) - a measure used to determine how much profit a cryptocurrency miner can make through manipulating the transactions involved in block production.
2 minutes

Let's find out Miner Extractable Value (MEV) meaning, definition in crypto, what is Miner Extractable Value (MEV), and all other detailed facts.

Miner extractable value (MEV) is a measure used to determine the profit that a crypto miner, validator, or an entity otherwise involved in block production can make by changing the order of transactions.

One of the first forms of MEV was bot-enabled front running. The bots would replicate user transactions and require higher gas fees to increase the transaction prices. Front running has since changed its form.

Miners have learned to take advantage of front running. They can make a profit when they place a specific transaction before one made by users. This automatically causes the later transaction to fail and the miners’ transaction to yield profit.

Such front-running manipulation happens because miners can reorganize transactions and use the privileged information of their position to get ahead of the queue and execute the trade.

One of the most common MEV attacks involved back running. In this case, miners can take advantage of their knowledge of transaction execution in market conditions. The miners can then place a specific transaction directly after the users and make a profit.

A sandwich attack combines elements of font and back running. The miners make a profit by taking advantage of the transaction information submitted by the users.

These types of MEV attacks can only be done by miners due to their ability to organize transaction data in a block. Value extraction may occur due to the design of the Ethereum mempool. The amount of block rewards is the preliminary information for miners to determine which transactions should be included in the block.