You’ve probably heard the word MEV by now. If you haven't, that's fine. You can learn all about it here ⤵️
Maximal Extractable Value — previously known as Miner Extractable Value — refers to a strategy to include, omit, or reorder transactions when making a new block. The goal of MEV is to make as much additional profit as possible. Block producers are best placed to do this as they have the ability to select and order transactions.
connected with lending, borrowing, or trading — the more opportunities there will be for block producers to make extra profit by deciding to include, omit, or reorder certain transactions.When this concept was first introduced, it was mostly associated with the Ethereum network, which used a proof-of-work consensus mechanism at the time.
Simply put, block producers guarantee the integrity of transactions on the network and ensure it continues to function. Without them, no new data can be added to the chain. Block producers are the ones who collect user transaction data and organize them into blocks to be added to the network chain. For example, selecting certain transactions over others and ordering them in a particular way may allow for additional profits due to resultant
A similar MEV strategy is “sandwiching”, which entails placing a buy order before and a sell order after a specific price-moving transaction, thereby taking advantage of the price pressure from both sides.against deposited digital assets as collateral. If the market moves and the value of the collateral drops below a certain price, that position is liquidated. The smart contracts involved often pay out a reward or fee to the transaction that triggers the liquidation.
However, MEV also presents a number of issues that mustn’t be ignored. Some implementations, such as front-running and sandwiching, produce bad outcomes for other users, who are forced to overpay on their trades, suffer from greater slippage, or lose out on value in what is essentially a zero-sum game.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
MicroStrategy sees fourth quarter loss after it writes down value of bitcoin holdingsMicroStrategy increased its total bitcoin holdings to 132,500 worth $1.8 billion at the end of 2022.
Read more »
US mine production value rises 3.8% to $98 billion in 2022 — USGSAccording to the annual USGS report, the increase in consumption of nonfuel mineral commodities compared with 2021 can be attributed to the continued recovery of markets from the pandemic.
Read more »
Do I have to give my ex half of my home’s value?Depending on the specifics of a divorce agreement, you could end up in court.
Read more »
Value of WisdomTree’s crypto holdings fell 61.9% in Q4The $82 billion fund manager booked a net loss in the fourth quarter, though revenues and fund inflows continued to soar.
Read more »
All-Star Superman #1 Triples In Value To $300 Thanks To James GunnThe announcements from James Gunn and Peter Safran over the new Superman: Legacy movie for 2025 have put a fire under All-Star Superman sales.
Read more »
Top TV variety stars in terms of brand value rankings for February | allkpopThe Korea Brand Reputation Institute has revealed brand value rankings of TV variety stars for the month of February, based on big data analysis.F…
Read more »