MEV (Maximal Extractable Value) represents the profit that can be extracted by reordering transactions. Sandwich attacks are the most common form affecting DEX traders.
What is MEV?
Block producers can reorder, insert, or censor transactions for profit:
- Originally “Miner” Extractable Value (now Maximal)
- Estimated $600M+ extracted annually
- Affects every public mempool transaction
Sandwich Attacks
- You submit a swap for 10 ETH
- Attacker sees your transaction in mempool
- Attacker front-runs: buys before you
- Your trade executes at worse price
- Attacker back-runs: sells after you
- Result: You lost value, attacker profited
Protection Strategies
- Private RPCs — Flashbots Protect, MEV Blocker
- Low slippage — Makes attacks unprofitable
- Aggregators — CoW Swap, 1inch Fusion
- Smaller trades — Less profitable to attack
Key Takeaways
- MEV is a hidden tax on DEX trading
- Sandwich attacks are most common for traders
- Use private RPCs to protect transactions
- Set appropriate slippage tolerance
- V4 hooks may help redistribute MEV to LPs