# Value Capture ⎊ Area ⎊ Resource 2

---

## What is the Extraction of Value Capture?

Value capture in decentralized finance involves extracting economic profit from market inefficiencies and protocol mechanisms. This extraction process is often automated through sophisticated algorithms that monitor real-time data streams for opportunities. The value captured can originate from price discrepancies across liquidity pools or from liquidations of undercollateralized positions.

## What is the Mechanism of Value Capture?

The primary mechanism for value capture in crypto derivatives is Maximal Extractable Value (MEV), where searchers and validators profit by strategically ordering transactions within a block. This mechanism allows for the capture of value that would otherwise be lost to slippage or market friction. The competition for value capture drives innovation in trading strategies and protocol design.

## What is the Consequence of Value Capture?

The consequence of value capture activities impacts market efficiency and fairness. While arbitrage helps to align prices across different venues, certain forms of value capture, such as front-running, can lead to negative externalities for ordinary users. The ongoing development of protocols aims to mitigate these negative consequences by distributing captured value more equitably among network participants.


---

## [Trading Fee Recalibration](https://term.greeks.live/term/trading-fee-recalibration/)

## [Time-Value of Transaction](https://term.greeks.live/term/time-value-of-transaction/)

## [Value at Risk Security](https://term.greeks.live/term/value-at-risk-security/)

## [Tokenomics Value Accrual](https://term.greeks.live/term/tokenomics-value-accrual/)

## [Economic Game Theory Applications in DeFi](https://term.greeks.live/term/economic-game-theory-applications-in-defi/)

## [Value-at-Risk Transaction Cost](https://term.greeks.live/term/value-at-risk-transaction-cost/)

## [Gas Adjusted Options Value](https://term.greeks.live/term/gas-adjusted-options-value/)

## [Notional Value](https://term.greeks.live/term/notional-value/)

## [Long-Term Value Accrual](https://term.greeks.live/term/long-term-value-accrual/)

## [MEV Impact on Fees](https://term.greeks.live/term/mev-impact-on-fees/)

---

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---

**Original URL:** https://term.greeks.live/area/value-capture/resource/2/