◽MEV process

To understand how Maximal Extractable Value works, we need to understand the transaction flow on the blockchain:

Whenever you initiate a transaction, there is a small waiting period when your transaction is pending and awaits to be added to the blockchain. It is during this period, that your transaction is stored in a mempool, which simply put is: a list of all unconfirmed transactions.

Miners or validators, who are responsible for adding unconfirmed transactions into the following blocks, have the power to access transactions listed in the mempool.

This is where MEV comes in, as it allows miners to extract profits by reordering these transactions in the processing order. With this ability, they include their own transactions and prioritize them over other unconfirmed transactions in the mempool in order to earn extra profits.