MEV(Maximal Extractable Value)
MEV, or Maximal Extractable Value, is value that validators, miners, or bots can capture by changing the order of transactions in a block.
✦ Key Insight
MEV can affect DeFi traders through front-running, sandwich attacks, and worse execution prices.
✕ Common Misconceptions
Ignoring MEV protection when making large DeFi swaps.
Detailed Explanation
How It Works
Bots scan pending transactions and try to profit from transaction ordering before blocks are finalized.
FAQs
Can MEV hurt traders?
Yes, especially during large or low-liquidity swaps.
In Practice
Dig Deeper
Smart Contract
A smart contract is self-executing code stored on a blockchain that automatically performs actions when certain conditions are met.
DeFi
Short for “Decentralized Finance,” it refers to financial applications built on blockchain networks that operate without traditional intermediaries.
Slippage
Slippage is the difference between the expected price of a trade at the time of submission and the actual executed price, caused by market movement or insufficient liquidity during confirmation.
Gas Fee
A gas fee is the cost paid to process a transaction or execute a smart contract action on a blockchain. It is the fee users pay to the network so their transaction can be included and confirmed.
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