KoinlyticsMEV (Maximal Extractable Value) is the value that a block producer can extract by reordering, including, or excluding transactions. It is not a bug; it is a natural consequence of building blocks with financial-transaction visibility. On Ethereum alone, MEV extraction is estimated in the hundreds of millions per year.
The three main flavors
- Arbitrage. Price mismatch between DEXs. A searcher spots the gap, executes buy on one and sell on other in the same block. Mostly benign.
- Sandwich attacks. Bot sees your pending swap, buys the token in front (raising price), lets your swap execute at worse price, sells behind (pocketing the spread). Direct value transfer from you to the bot.
- Liquidations. Racing to be the one liquidator who claims collateral discount from an under-water position. Aggressive.
The actors
- Searchers. Bots that scan the mempool and construct profitable transaction bundles.
- Builders. Aggregate searcher bundles and other transactions into a full block.
- Proposers (validators). Choose which builder's block to publish.
- Relays. Middlemen ensuring proposers commit to a block without seeing its contents.
PBS: Proposer-Builder Separation
The current fix. Validators no longer build their own blocks; they auction that right. This splits MEV extraction from block production, preventing validators from directly frontrunning their own users. Flashbots MEV-Boost implements PBS on Ethereum today. ~90% of blocks use it.
How to protect yourself as a user
- Use MEV-protected RPCs (Flashbots Protect, MEV Blocker) that route your tx via private mempool.
- Set tight slippage. Bots make sandwiches profitable when your slippage is high.
- Use CoW Swap, 1inch Fusion, or similar batch auctions that fight MEV in the design.
- On Solana: use Jito bundles or protected RPC.
MEV on L2s
Optimistic L2s (Base, Arbitrum) have a single sequencer that could extract MEV. In practice, most run FIFO ordering and don't reorder for profit. But this is a trust assumption. Decentralized sequencing (in the roadmap for most L2s) will reintroduce MEV competition.