Copyright © 2023 by Verilog Solutions. All rights reserved.

April 26, 2023

by Verilog Solutions


1. Introduction

Maximal Extractable Value (MEV) refers to the maximum value a blockchain miner or validator can make by including, excluding, or changing the order of transactions during the block production process.

The term MEV, originated during the Proof-of-Work era of Ethereum when miners controlled which blocks and transactions were inserted into the blockchain. Ethereum’s move to Proof-of-Stake (PoS) saw power over block proposal transition from miners to validators, but the pursuit of profit through manipulating transactions remained, so now the term “Maximal Extractable Value” is used.

MEV and transaction reordering are not just explained as a theoretical concept, but as a dynamic that is already occurring at scale in the form of transaction frontrunning on decentralized exchanges and which can have a significant impact on the user experience. From what has been able to be uncovered, over $908.3 million worth of MEV has been extracted since 2020. Quantifying the exact amount of MEV is challenging, given that many extraction techniques are designed to be concealed to maintain a competitive advantage.

MEV occurs when block producers in a blockchain (e.g. miners, validators) are able to extract value by arbitrarily reordering, including, or excluding transactions within a block, often to the detriment of users. Simply put, block producers can determine the order in which transactions are processed on the blockchain and exploit that power to their advantage.

The key players involved in MEV are wallets, searchers, validators, mempools, and relays.

Credit: The MEV Supply Chain: a peek into the Future of this Industry by Thegostep and Flashbots

Credit: The MEV Supply Chain: a peek into the Future of this Industry by Thegostep and Flashbots


A wallet is a digital or physical device that stores your private keys, which are used to access and manage cryptocurrency and blockchain-based assets, like NFTs. Most of the on-chain interactions for regular users are achieved through wallets.


Searchers are individuals who interact with the mempool to monitor unconfirmed transactions and gain insight into imminent transactions before they are permanently recorded on the blockchain. Searchers implement algorithms that identify MEV opportunities from the pending transactions and generate transactions that extract value from found opportunities, such as front-running.