Validator Extractable Value

Validator extractable value, or MEV, is the profit that validators can make by reordering, including, or excluding transactions within the blocks they produce. In the context of derivatives, this can manifest as validators front-running liquidation transactions to extract value for themselves.

This practice introduces an adversarial element to the blockchain, where the infrastructure itself can be used to extract rent from users. While it provides a source of income for validators, it also creates negative externalities like increased slippage and unfair execution.

Research into mitigating these effects involves creating more transparent and fair transaction ordering mechanisms. It is a central topic in the study of blockchain game theory and market microstructure.