There are two main ways for miners to make money in blockchains: (i) the block reward and (ii) collected transaction fees.MEV is a third revenue source, which can be extracted from the application layer (the smart contracts). You can think of MEV as if someone leaves money on a table (after having a juciy drink), and you'll obviously want to get this tip. This is where the MEV monsters come and fight over the money that you left lying around. While those monsters fight, they occupy valuable blockchain and network traffic space, making your transactions more expensive and slower.
What's even worse, these monsters fight over your money. You, an unknowing trader on Uniswap, other exchange, lending or farming platform.
That doesn't seem right, does it?
Whenever you interact on the following DeFi platforms, you might leave money on the block:
The amounts extracted from MEV accumulate to millions of USD as quantified by researchers.
MEV was shown to hurt blockchain security by increasing blockchain forks.
Why are miners not yet forking over MEV? Because they don't know yet how. Just like they didn't know how to extract MEV in the first place.
MEV triggers network layer front- and back-running competitions.
"Flashbots" run a server to mediate between monsters fighting over MEV opportunities, helping them to steal your money. This server communicates with miners on how to steal the most value from you. Flashbot-enabled miners run MEV geth, a modified geth version provided by flashbots.
MEV can be avoided, by design. In a truly decentralized way. Check out SwapSwap as an example.