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Glossary

MEV, explained without the jargon

Why a bot captured $7.7M this morning, and who actually paid for it.

Intermediate · 5 minute read · The WatchPaper
At a glance
  1. Whoever orders the transactions in a block can profit from that ordering — that profit is called MEV.
  2. The harshest common form is the sandwich: a bot trades before and after your order to capture the price it moves.
  3. Private transaction relays and batch auctions both remove the ordering advantage that makes MEV possible.
A sandwich attack across three steps in one blockThree boxed steps inside a single block: the attacker buys, the victim's order fills at a worse price, and the attacker sells, with a small price line showing the bump and drop.ONE BLOCK1Attacker buys firstpushes the price up2Victim's order fillsat the worse price3Attacker sellsinto the price it movedprice impact
All three trades settle in the same block — the victim never sees it coming.

Transactions do not reach a blockchain in the order they were sent. They wait in a public queue, and whoever builds the next block decides the order. That discretion has a value, and the value has a name: maximal extractable value.

The mildest form is arbitrage. Two venues disagree on a price, a bot buys on one and sells on the other inside a single block, and the disagreement closes. Nobody is worse off than they chose to be.

The harsher form is the sandwich. A bot sees a large buy waiting in the queue, places its own buy in front, lets the victim's order push the price up, and sells immediately behind. The victim gets a worse fill and pays the difference. They rarely know it happened.

This morning's case was the unusual one: an attacker exploiting a wallet had their own transaction front-run, and a bot took $7.7M that the attacker was trying to take. The protocol then froze the address. MEV is neutral machinery — it serves whoever is fastest, not whoever is right.

Mitigations exist. Private transaction relays keep orders out of the public queue; batch auctions settle everyone in an interval at one price, removing the ordering advantage entirely.

Key terms
MEV
Maximal extractable value — profit available to whoever controls the order of transactions in a block.
Sandwich attack
Placing a trade immediately before and after a victim's order to capture the price it moves.
Private relay
A route that submits a transaction directly to a block builder, bypassing the public mempool.
Frequently asked
Is MEV illegal?

Generally no — it exploits how public blockchains already work rather than any unauthorised access, though some jurisdictions are actively examining whether certain forms should be regulated.

Can I protect a single trade from being sandwiched?

Using a private transaction relay for that specific trade, or setting a tight slippage tolerance, both reduce the opportunity for a bot to profit from it.

Do all blockchains have the same MEV risk?

No — it depends heavily on how each chain orders transactions and whether private relays or fair-ordering mechanisms are available.