# Maximal extractable value: the consequences of transaction order

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.

Evidence: [Maximal extractable value](https://ethereum.org/developers/docs/mev/)

Canonical: https://degreesofsatoshi.com/encyclopedia/maximal-extractable-value/
Published: 2026-10-02
Substantively modified: 2026-10-02
Independently verified by an automated reviewer: 2026-10-02T15:08:18.373Z

AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied.

## Key facts

- **Source:** Inclusion and ordering can change economic outcomes. ([Maximal extractable value](https://ethereum.org/developers/docs/mev/))
- **Sandwich:** A trader can be placed between two inventory-changing trades. ([Maximal extractable value](https://ethereum.org/developers/docs/mev/); [Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing))
- **Liquidation:** Eligibility creates competition to execute liquidation calls. ([Aave V3 Pool](https://aave.com/docs/aave-v3/smart-contracts/pool); [Maximal extractable value](https://ethereum.org/developers/docs/mev/))

## 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.

Evidence: [Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing)

## 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.

Evidence: [Maximal extractable value](https://ethereum.org/developers/docs/mev/); [Aave V3 Pool](https://aave.com/docs/aave-v3/smart-contracts/pool)

## 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.

Evidence: [Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing); [Maximal extractable value](https://ethereum.org/developers/docs/mev/)

## Questions

### 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.

Evidence: [Maximal extractable value](https://ethereum.org/developers/docs/mev/)

## Claims and scope

### maximal-extractable-value-quick-answer

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: {"collection":"defi","dataAsOf":null,"blockHeight":null}

### maximal-extractable-value-fact-source

Source: Inclusion and ordering can change economic outcomes.

Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null}

### maximal-extractable-value-fact-sandwich

Sandwich: A trader can be placed between two inventory-changing trades.

Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null}

### maximal-extractable-value-fact-liquidation

Liquidation: Eligibility creates competition to execute liquidation calls.

Scope: {"collection":"defi","dataAsOf":null,"blockHeight":null}

## Sources

- [Maximal extractable value](https://ethereum.org/developers/docs/mev/) — ethereum.org contributors. Transaction ordering, arbitrage, liquidation and sandwich mechanisms. Locator: MEV extraction; Examples of MEV. Retrieved: 2026-10-02.
- [Uniswap v2 pricing](https://developers.uniswap.org/docs/protocols/v2/concepts/pricing) — Uniswap. Reserve-dependent quotes, trade bounds and external price observations. Locator: Pricing Trades; Exact Input; Exact Output. Retrieved: 2026-10-02.
- [Aave V3 Pool](https://aave.com/docs/aave-v3/smart-contracts/pool) — Aave. Pool operations, collateral restrictions and liquidation settlement. Locator: supply; withdraw; borrow; repay; liquidationCall. Retrieved: 2026-10-02.

## Revision history

- 2026-10-02: First publication after primary-source research and independent automated verification.

## Cite this entry

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/