Maximum Extractable Value, or MEV, refers to the profit that block producers, such as miners or validators, can gain by strategically ordering, censoring, or inserting transactions within the blocks they produce. This value is derived from their privileged position in determining the sequence of operations on a blockchain. MEV can arise from various activities, including arbitrage opportunities and liquidations. It represents an additional revenue stream for network participants.
Context
MEV is a widely discussed and complex topic in blockchain ecosystems, particularly within decentralized finance. It raises concerns about potential market manipulation, transaction fairness, and the centralization of network power. Researchers and developers are actively exploring solutions to mitigate negative MEV effects and distribute its value more equitably among network participants. This ongoing challenge influences protocol design and the overall security of decentralized applications.
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