[WEB3] Understanding MEV (Miner Extractable Value) & Flashbots

[JackaL]

[WEB3] Understanding MEV (Miner Extractable Value) & Flashbots

If you trade on decentralized exchanges (DEXs) like Uniswap, you have likely been "front-run" by an MEV bot. Here is the technical breakdown of how MEV searchers extract millions in profit directly from the Ethereum mempool.

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How the Sandwich Attack Works:

1. Monitoring: The bot scans the public mempool for pending, large trades (e.g., someone buying $100k of PEPE).
2. Front-Running: The bot pays a higher gas fee to buy PEPE *before* the victim, slightly raising the price.
3. Back-Running: The victim's trade executes at the artificially higher price. The bot immediately sells its tokens for a risk-free profit.

To protect yourself from MEV bots, always route your transactions through private RPCs like Flashbots Protect.