The Tie Research
MEV: An Intro to Value Extraction
By Vaish Puri
April 28, 2023
- MEV refers to the total amount of Ether miners can extract from manipulation of transactions. This manipulation can come in a few forms, but most tend to be through re-ordering of transactions within blocks produced and generalized frontrunning.
- The three most common examples of MEV are: DEX arbitrage, liquidations, and sandwich trading
- MEV-Geth, a proof-of-concept for permsisionless MEV extraction, was recently designed and implemented by Flashbots with the goal of relieving network congestion caused by frontrunning and backrunning bots.
- MEV-Boost separates the role of PoS validators: block building and block proposal. Searchers will send bundles to block builders, or they may be block builders themselves.
- OpenMEV is a platform for facilitating aggregation and direct communication between block producers and validators. The goal is to allow users to partake in MEV revenue opportunities.
- Pure revenue opportunities created as a result of DEX arbitrage
- Priority Gas Auction (PGA)
- DEX arbitrage
- Liquidations
- Sandwich Trading
- AMMs
- Price Slippage
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