What Is the Concept of ‘Maximum Extractable Value’ (MEV)?
MEV is the maximum value that can be extracted from block production beyond the standard block reward and gas fees by including, excluding, or reordering transactions within a block. Validators or miners can capitalize on MEV by exploiting opportunities like decentralized exchange (DEX) arbitrage or liquidations.
Glossar
Block Reward
Incentive ⎊ The block reward, within cryptocurrency networks employing proof-of-work consensus, represents the economic inducement for miners to validate transactions and append new blocks to the blockchain.
Block Production
Genesis ⎊ Block production, within cryptocurrency networks, represents the foundational process of creating and validating new blocks on a blockchain, fundamentally securing the network and enabling transaction finality.
Validators
Attestation ⎊ Validators, within cryptocurrency networks, represent nodes actively participating in a consensus mechanism, verifying and attesting to the validity of new blocks or transactions.
Maximum Value
Threshold ⎊ This denotes the upper boundary of a variable, such as the highest price or notional amount, that a system or contract is designed to handle or process within defined operational parameters.
Gas Fees
Mechanism ⎊ Gas fees represent the computational cost required to execute transactions on a blockchain network, functioning as a deterrent against denial-of-service attacks and incentivizing miners or validators to process transactions.
Miners
Validation ⎊ Miners, within the cryptocurrency ecosystem, represent network participants who compete to bundle pending transactions into blocks, subsequently adding these blocks to the blockchain through computationally intensive processes.