MEV

The term began as Miner Extractable Value and after Ethereum's Merge (the move to Proof of Stake on 15 September 2022) was renamed Maximal, because validators and builders now capture it rather than miners. It arises because in DeFi the ordering of transactions carries economic value. The concrete forms are frontrunning (inserting a transaction ahead of a pending one by paying higher priority), backrunning (placing one right after, as in arbitrage that rebalances prices across DEXs), the sandwich attack (combining both around a victim) and competition for liquidations in lending protocols.

The architecture that organizes this market is PBS (Proposer-Builder Separation), which separates the proposer (the validator chosen by consensus) from the builder (who orders transactions and assembles the block). Builders compete in an auction bidding with part of the captured MEV. The reference implementation is MEV-Boost, built by Flashbots and deployed around the Merge: a beacon node sidecar that outsources block construction through relays. The roadmap targets an enshrined PBS built into the protocol itself, still in research as of June 2026.

MEV is a structural externality of public blockchains with a transparent mempool and affects execution fairness, decentralization and censorship resistance. For a tokenization company it matters because any on-chain issuance, liquidation or swap of an asset can be reordered. Practical user-side mitigations are slippage limits, private transactions (private orderflow) and batch order auctions. AMM DEXs like Uniswap are the terrain of sandwiching, and protocols such as Aave or Compound are a source of liquidation MEV.