MEV Shapes DeFi Trades Through Arbitrage, Sandwich Attacks and Flashbots Tools

An ordinary decentralized exchange swap can become a contest over block space: the same trade may tighten market prices or leave a user with a worse fill depending on how transactions are arranged. Maximal extractable value (MEV) refers to value participants capture by influencing which transactions a block includes or excludes and the order in which included transactions run. It is not a token; it is an economic result of block production. Ethereum moved to proof-of-stake with The Merge on Sept. 15, 2022. Validators propose blocks, searchers look for opportunities to earn MEV, builders assemble transactions and choose their order, and relays connect builders with validators. The roles show how opportunities can arise both when a block’s contents are selected and when its transactions are arranged.

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