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Encyclopedia DeFi · Entry 58

Maximal extractable value: the consequences of transaction order

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Key facts

Key facts for Maximal extractable value: the consequences of transaction order
FactDetailSource
SourceInclusion and ordering can change economic outcomes.[1]
SandwichA trader can be placed between two inventory-changing trades.[1][2]
LiquidationEligibility creates competition to execute liquidation calls.[3][1]
01

The same transactions can have different outcomes

A pool’s quote depends on the state at execution. If transaction A moves the reserves before transaction B, B meets a different curve position than it would have met first. Contract validity does not remove this ordering dependence.

For a concrete example, a pending swap can have a quoted output of 100 B and a minimum of 99. A preceding trade may reduce its result to 99.1. That is valid within the encoded bound even though the original quote was better.

02

Arbitrage, liquidation and sandwiches differ

Arbitrage may narrow a gap between venues. Liquidation executes the market’s collateral enforcement and can reward the caller. A sandwich instead places a trade before a user’s swap and another afterward, potentially profiting from the user’s movement along the curve.

These activities have different effects on other users. Grouping all of them under MEV describes the ordering opportunity, not a judgment that every instance is the same economic behavior.

03

Execution protection has a scope

A meaningful minimum output restricts how far execution may worsen. It does not restore the original market state, prevent all ordering effects or guarantee inclusion. A very permissive bound leaves more room for an adverse result.

Submission services and auction designs can change who sees a request and who chooses its order. Those systems have their own assumptions. A claim of complete MEV protection needs a defined threat model and cannot be inferred from a wallet’s branding.

Direct answers

Questions people ask

Did MEV disappear when Ethereum adopted proof of stake?

No. The term maximal extractable value is used because inclusion and ordering opportunities are not specific to proof-of-work mining. The actors and construction process can change while the mechanism remains.

Inspect the evidence

The answer and key facts have stable claim links. These records retain the scope and qualification when reused.

Maximal extractable value, or MEV, is value available through controlling which transactions are included, excluded or ordered in a block beyond ordinary block rewards and gas fees. Arbitrage and liquidation competition are examples; sandwiching can worsen another trader’s execution.

Scope: DeFi. Verification: verified · 2026-10-02T15:08:18.373Z.

Link to this claim
Source: Inclusion and ordering can change economic outcomes.

Scope: DeFi. Verification: verified · 2026-10-02T15:08:18.373Z.

Link to this claim
Sandwich: A trader can be placed between two inventory-changing trades.

Scope: DeFi. Verification: verified · 2026-10-02T15:08:18.373Z.

Link to this claim
Liquidation: Eligibility creates competition to execute liquidation calls.

Scope: DeFi. Verification: verified · 2026-10-02T15:08:18.373Z.

Link to this claim
Revision history
  1. — First publication after primary-source research and independent automated verification.

Source register

Sources and references

Retrieval dates and locators are recorded individually.
  1. Maximal extractable valueethereum.org contributors

    Transaction ordering, arbitrage, liquidation and sandwich mechanisms.

    Locator: MEV extraction; Examples of MEV · Retrieved: 2026-10-02Open source
  2. Uniswap v2 pricingUniswap

    Reserve-dependent quotes, trade bounds and external price observations.

    Locator: Pricing Trades; Exact Input; Exact Output · Version / scope: Uniswap v2 · Retrieved: 2026-10-02Open source
  3. Aave V3 PoolAave

    Pool operations, collateral restrictions and liquidation settlement.

    Locator: supply; withdraw; borrow; repay; liquidationCall · Version / scope: Aave V3 · Retrieved: 2026-10-02Open source
How this article was made

Research and drafting use AI assistance. A separate automated review checks claims against primary sources; no external expert or named human review is implied. Publication, substantive editing, source retrieval and verification are recorded separately. This version was independently checked by an automated reviewer on 2 October 2026.

Editorial method and corrections

Degrees of Satoshi editorial project. “Maximal extractable value: the consequences of transaction order.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/maximal-extractable-value/