It refers to the maximum amount of value that can be extracted from a given DeFi protocol or smart contract by a user or group of users. MEV has become a crucial factor in determining the profitability of DeFi strategies and has led to the emergence of new tools and techniques for maximizing returns. MEV denotes the additional value that blockchain validators — those creating new blocks on the network — can acquire by manipulating the order of transactions within the blocks they create. This manipulation, often referred to as "front-running," can provide miners with an extra source of profit beyond the standard block rewards and gas fees they collect for their work. Often miners are reordering the transactions on behalf of a third party and are typically "bribed" with a large amount of the revenue for doing so. MEV is a byproduct of the decentralized nature of blockchain technology. In traditional financial markets, transaction orders are strictly enforced to prevent front-running. However, in the decentralized world of cryptocurrencies, miners are free to sequence transactions as they see fit. This freedom, while integral to the blockchain's decentralized ethos, can lead to situations where miners prioritize transactions that offer them the most MEV, potentially at the expense of other network participants. When the stakes are high enough, MEV can even incentivize miners to create blockchain forks, potentially disrupting future transactions and compromising the security of the consensus layer. One common scenario where MEV comes into play is in the context of decentralized exchanges (DEXs). Arbitrage opportunities, where a trader profits from price discrepancies between different markets, are built into the design of DEXs. Miners, aware of these opportunities, can sequence their blocks in such a way as to exploit these arbitrage opportunities before other traders, effectively "front-running" them. Another common extraction technique is back-running, which occurs when a miner places a sell order after noticing a large buy order. This technique allows the miner to sell into the buying pressure, thereby increasing their profits. Sandwich deals are yet another technique where miners place a sell order right after a transaction that affects the market price and a buy order right before it. This ensures that the miner benefits from price fluctuations caused by their own transactions. Miners also employ various tools to aid in MEV extraction. Flash loans, for instance, allow miners to borrow, use, and repay funds within the same transaction. This enables them to execute profitable trades without requiring upfront capital. [[Jaredfromsubway.eth MEV bot]] is the name associated with one of the most well-known MEV bots in the Ethereum space.