Awarded once after a correct answer.
Explain how ordering changes outcomes
Useful first : Liquidity pools and automated market makers · Ethereum accounts and transactions
Challenge the system · Step 5 / 6
Maximal extractable value concerns value available through transaction inclusion, exclusion and ordering beyond ordinary block rewards and fees.
The essentials
Maximal extractable value concerns value available through transaction inclusion, exclusion and ordering beyond ordinary block rewards and fees. Searchers may identify opportunities; builders and proposers participate in block construction. The roles and interfaces vary by network and infrastructure.
How it works
Arbitrage can align prices across venues, while sandwiching can worsen a user’s execution. In a simplified sandwich, a transaction before the user moves a pool’s price and another afterwards unwinds exposure. The victim’s execution limits constrain which outcomes can still succeed.
What to watch
Private submission, batch auctions and other designs can change exposure to order information. They introduce their own availability, trust and execution assumptions. “Private” does not establish guaranteed inclusion, best execution or freedom from every form of MEV.
Understand the details
Analyse a trade with its pre-trade pool state, size, minimum output and surrounding transactions. The same signed operation can encounter different state depending on its position. Separate protocol-valid execution from economically acceptable execution: validators can accept an operation that satisfies its signature and limits even when the signer dislikes the result.
Boundaries and common mistakes
Not every price movement around a trade proves a sandwich. Attribution requires transaction evidence, and protective mechanisms do not eliminate contract or market risk.
The mechanism at a glance
- 01Observe intent
- 02Construct ordering
- 03Execute against state
- 04Evaluate user outcome
Read these as connected concepts, not necessarily consecutive steps.
Read the explanation
Analyse a trade with its pre-trade pool state, size, minimum output and surrounding transactions. The same signed operation can encounter different state depending on its position. Separate protocol-valid execution from economically acceptable execution: validators can accept an operation that satisfies its signature and limits even when the signer dislikes the result.
Put the mechanism into context
A fictional user signs a swap with a broad minimum-output tolerance. Other valid transactions change the pool before it executes, but its minimum is still met.
Apply it in the workshop →What this mechanism does not guarantee
Not every price movement around a trade proves a sandwich. Attribution requires transaction evidence, and protective mechanisms do not eliminate contract or market risk.
The distinction that changes the analysis
Two swaps against the same pool can produce different results when their order changes. Keep the initial reserves fixed, then compare the two sequences. A valid transaction can still receive a worse execution outcome because earlier transactions changed the state.
Explain it yourself
Revisit the case above. Name what is established, what remains to be checked and the evidence needed to conclude. A strong answer addresses both sides of the diagram.
Apply the lesson to a case
A fictional user signs a swap with a broad minimum-output tolerance. Other valid transactions change the pool before it executes, but its minimum is still met.
The signature authenticates the operation, not a promise of the original quote. Examine the accepted limits and ordering to explain the result.
Prepare a correction note
Describe the passage and the proposed correction. This creates a local note for you to share; it sends nothing. Do not include personal or confidential information.