What is MEV and why it matters ๐ธ
๐ค MEV stands for Maximal Extractable Value. It refers to profits that bots or validators can make by reordering, including, or excluding transactions within blocks.
๐ค The most common MEV tactic is a sandwich attack. A bot sees your pending trade, places a transaction just before it, and another one right after. This traps your trade in the middle and forces you to buy higher or sell lower. The bot takes the difference as profit.
This can happen on any DEX with no MEV protection. It targets large trades or users who forget to adjust slippage โ๏ธ
A real example: a trader tried swapping $220,000 in USDC to USDT. A bot drained the trade using a sandwich attack, leaving the user with only $5,200. The attacker made $8,000 profit and tipped $200,000 to the block builder to pull it off.
๐ค This happened because the trade was sent directly to the mempool with no slippage tolerance set. The bot saw the transaction early and manipulated the prices.
MEV is not a bug. It is a design feature of public blockchains. To protect yourself, always use MEV-protected frontends of DEXs, set slippage correctly, and avoid large swaps in low liquidity pools โ๏ธ
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