๐งฎ #MEV101: Who mines can also manipulate.
In the world of blockchains, not everything is as neutral as it seems.
MEV (Maximal Extractable Value) is the maximum value that a validator (or miner) can extract by manipulating the order of transactions.
๐ What is MEV?
๐น It is when validators reorganize, insert, or exclude transactions within a block
๐น Goal: to profit more, usually at the expense of other users
๐น Common in blockchains like Ethereum
๐ก Types of MEV:
๐ธ Front-running โ Validator sees your transaction and inserts their own first
๐ธ Back-running โ Enters right after a profitable transaction
๐ธ Sandwich attack โ Buys before yours, sells after โ you pay the price
โ ๏ธ Why does this matter?
โ It can distort prices on DEXs
โ Harms ordinary traders and investors
โ Encourages centralization and unfair competition
โ
Solutions in development:
๐ธ Networks with proposer-builder separation (PBS)
๐ธ Private transactions (Flashbots)
๐ธ Better design of DEXs resistant to MEV
โก๏ธ MEV shows that even in decentralized systems, the power of those who build the block can make all the difference.
#MEV101 #BlockchainProfundo #DeFiTransparente