Miner Extractable Value (MEV)
Miner Extractable Value (MEV) is the profit miners can gain by arranging the order of transactions within a blockchain block. This concept is prevalent in proof-of-work (PoW) and similar blockchain systems. MEV opportunities arise because miners can prioritize transactions for personal gain, engaging in actions like front-running and arbitrage.
Front-running involves reordering transactions to place their own ahead, capitalizing on potential price movements. Arbitrage exploits price differences between decentralized exchanges. MEV’s value fluctuates and can include trading profits and fees. This practice has stirred ethical and technical concerns, prompting initiatives like MEV-Geth, Flashbots, and Ethereum 2.0 fee market reforms to mitigate its impact on blockchain networks.