Flashbots, MEV, and why DeFi users should care

This article provides an introduction to the topic of maximum extractable value (MEV), formally called miner exctractable value under PoW Ethereum. It discusses how MEV has shaped the infrastructure of the Ethereum network through the introduction of Flashbots and how investors can protect themselves from the suboptimal execution of their trades due to MEV.

Maximum extractable value (MEV) is an umbrella term for earnings that can be harvested from the users of a blockchain ecosystem by changing the ordering of transactions within a block or inserting extra transactions. Its existence is entirely due to the fact that blockchain networks usually offer no fair mechanism for determining if one transaction was submitted earlier than the others. In most networks, the miner or validator who creates a block has the exclusive freedom to select and arrange transactions from the mempool in whatever way desired.