Crypto Term: MEV (Maximal Extractable Value)
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It’s the invisible tax you pay every time you trade on a DEX without the right architecture.
The Breakdown:
The blockchain is a dark forest. When you hit "Swap" on Uniswap, your transaction doesn't execute instantly. It sits in a waiting room called the Mempool.
That’s where algorithmic MEV bots hunt.
If they see you buying a large bag, they execute a Sandwich Attack:
01. Front-run: The bot pays a higher miner fee to buy the exact same token milliseconds before you, pumping the price.
02. The Trap: Your transaction executes, forcing you to buy at the new, artificially high price.
03. Back-run: Milliseconds after you, the bot dumps its tokens into your buy pressure, extracting a risk-free profit.
While you celebrate catching a "gem," an algorithm just skimmed 2-3% off your capital.
Amateurs trade on default settings and feed the bots. Professionals use Private RPC endpoints to make their liquidity invisible in the Mempool.
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