FOLLOW THE MECHANISM
- 1Intent
A user requests a transaction with conditions.
- 2Observation
Other participants may see or infer the request.
- 3Ordering
Builders or sequencers select a valid sequence.
- 4Outcome
Execution prices and opportunity proceeds depend on that sequence.
A conceptual sequence. Real implementations can add steps, intermediaries, and conditions.
Ordering is economically important
Maximal extractable value, or MEV, describes value obtainable from controlling transaction inclusion, exclusion or order beyond ordinary protocol rewards. A blockchain can execute each transaction correctly while different valid orderings produce different financial outcomes. A swap before a large purchase gets a different price from the same swap after it. This is why correctness of individual transactions does not imply that the ordering process is economically neutral.
Several roles compete over the sequence
Searchers identify opportunities such as arbitrage or liquidation. Builders can assemble candidate blocks, and proposers choose or construct blocks according to the network’s architecture. Layer-two sequencers can also have ordering power. These roles and markets differ across networks and change over time. A payment to secure inclusion can transfer much of an opportunity’s proceeds to another participant. Saying a validator receives all MEV ignores the chain of actors that discover, construct and select transactions.
Not every opportunity has the same effect
Arbitrage can align inconsistent prices, and liquidation can recover lending debt. A sandwich strategy instead places transactions around a user’s trade to capture some of its execution value. These are distinct behaviors even when all involve ordering opportunities. A user’s minimum-output bound limits a permitted result, but a loose bound can leave room for worse execution. This atlas explains the mechanism without providing a trading strategy or assuming every observed price difference indicates misconduct.
Protections move the trust boundary
Private submission, batching, auctions and encrypted-order designs try to change visibility or competition. They can reduce particular forms of extraction while introducing dependence on relays, solvers or other infrastructure. Censorship resistance, prompt inclusion, best execution and public verifiability do not always improve together. A useful evaluation asks who sees the order before execution, who chooses its place, what constraints are enforced, and what happens if the preferred route fails. No generic private label establishes that a trade is protected in every case.
MAKE IT CONCRETE
Illustrative same-block difference
If a purchase raises a pool’s price, buying just before it and selling afterward can capture value from the movement. The victim’s swap may still satisfy its stated minimum output, illustrating why valid execution and favorable execution differ.
FAILURE PATHS & COMMON MISREADINGS
Where the model can break
- MEV is broader than sandwich attacks.
- Private routing changes information exposure but does not guarantee the best outcome.
KEEP EXPLORING