[EXPLAINER] How MEV Bots Actually Make Money on Ethereum⁠

[JackaL]

[EXPLAINER] How MEV Bots Actually Make Money on Ethereum

You hear about MEV (Maximal Extractable Value) bots making millions, but how does the math actually work? It is not trading; it is purely mathematical exploitation of the blockchain's mempool.

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The Sandwich Attack (The Most Common MEV):
When a regular user submits a large transaction to buy a token on Uniswap, that transaction sits in the public "mempool" waiting for a miner/validator to confirm it.

1. The Scan: The MEV bot sees this pending transaction.
2. Front-running (Buy): The bot pays a massive gas fee (bribe) to the validator to process its own buy order FIRST. The bot buys the token, pushing the price up.
3. The Victim: The user's original transaction executes at this new, higher price, pushing the price up even further.
4. Back-running (Sell): The bot immediately sells the tokens it just bought at the artificially inflated price, pocketing the difference.

Note: Writing an MEV bot in Solidity/Rust requires deep knowledge of gas optimization, but understanding the concept is mandatory if you trade on decentralized exchanges so you can set your slippage correctly to avoid getting sandwiched.