What is MEV? - Maximal Extractable Value In Crypto Explained

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This video answers the questions: What is MEV in crypto? How does MEV in crypto work? What is Maximal Extractable Value? - Maximal Extractable Value (prior known as Miner Extractable Value) MEV in crypto will be explained.

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Timestamps:
0:00 Introduction
0:25 What is the Maximal Extractable Value (MEV) & how exactly does it work?
1:36 Examples of Maximal Extractable Value (MEV)
3:02 Video end

MEV, also known as the maximum value a miner can extract from moving transactions when creating a block on a blockchain network, is also described to as a "invisible tax" that miners can levy on users.

The initial prediction of the activity was made in 2014 by an algorithmic trader using the alias Pmcgoohan, who cautioned that miners would covertly reorder transactions in a mempool for private advantage.

"Miners can see all the contract code they run (obviously), and the order in which transactions run is up to individual miners," the trader stated in a Reddit thread. What prevents a miner from front-running an Ethereum marketplace implementation?

In a 2019 study titled "Flash Boys 2.0," smart contract researcher Phil Daian and his coworkers developed this concept and introduced the concept of "miner extractable value" (MEV), which they defined as "the total amount of ETH miners can extract from manipulation of transactions within a given time frame." The phenomenon became well-known after researchers Georgios Konstantopoulos and Dan Robinson wrote a blog post in August 2020 comparing Ethereum's mempool to a "dark forest" due to the intense rivalry and shady tactics employed to grab MEV.

Flashbots estimates that since the start of 2020, around $674 million has been obtained through Ethereum's transaction reordering; however, some experts believe that the actual amount may be far higher.


Not only in this video various crypto topics will be explained. Remember to leave a like, and subscribe to the channel for more materials like this.

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