What Is MEV?

When this concept was first introduced, it was mostly associated with the Ethereum network, which used a proof-of-work (PoW) consensus mechanism at the time. As such, miners were the ones with the power to reorder, include, or exclude transactions when producing blocks, and could make these choices to squeeze out extra value.

This led to the term Miner Extractable Value being coined to explain the phenomenon of this extraction of as much extra profit as possible. However, in September 2022, Ethereum finalized The Merge, a technical upgrade that switched the network’s consensus mechanism from PoW to proof-of-stake (PoS).

As such, new blocks on the Ethereum network are no longer created by miners but by validators. PoS systems aren’t immune to MEV, however. Blocks are still being created, so whoever chooses which transactions to include, and in what order, can make decisions that will help them to extract as much money from a block as possible. While the old MEV concept still exists, it is now said to stand for Maximal Extractable Value, since it’s no longer exclusive to miners#HotTrends #BNBChain #BOME #ID #POLYX