Every time you swap, there’s a chance someone else is profiting off your trade.
Because pending blockchain transactions are visible in a waiting area called the “mempool” before they’re confirmed and finalized, profit-seeking actors can spot valuable trades and try to capture a portion of that value.
That value, known as MEV, is captured by reordering or surrounding valuable transactions in the block. Understanding MEV and ways to mitigate it is an important concept if you’re an active swapper.
Here’s how MEV works and impacts your swaps.
What is MEV?
MEV, or Maximal Extractable Value, is the profit that can be captured by including, excluding, or reordering transactions in a block before it’s finalized on a blockchain. MEV is made possible by the following conditions:
- Public mempool visibility. Because blockchains are transparent and permissionless, pending transactions sit in a queue (the public mempool) where anyone can see them before they’re confirmed.
- Price moves on every swap. On AMM-based DEXs, each swap shifts a token’s price along the liquidity curve—so if another trade lands ahead of yours, it can change the rate you receive.
- Profit in reordering. That price impact makes transaction ordering valuable: moving a trade forward or backward can create an immediate arbitrage or sandwich opportunity.
- Entities seeking to capture it. Searchers and block builders watch the mempool and insert their own transactions to seize that value, competing to capture MEV before the block is finalized.
So who’s actually profiting from all this? Let’s break it down.
Who captures MEV?
Typically, two main groups compete to capture MEV:
- Searchers are typically sophisticated traders running bots. They scan the public mempool for pending trades that look profitable. When they spot one, they submit a bundle of transactions that lands just before or after yours. This lets them profit from the price impact of your trade, while you get worse execution.
- Block builders decide which transactions make it into a block, and in what order. Their goal is to pack in as much value as possible so a validator will choose their block. To do that, they often include searcher transactions that pay tips or higher priority fees, and sometimes they run the same MEV plays themselves to pocket the profit.
How MEV is captured
Public mempool visibility gives MEV searchers the chance to spot your trade — and profit from it. Here are the most common ways that can happen:
- Frontrunning: A searcher sees your swap and submits the same trade with a higher priority fee, so their transaction is included in the block before yours. They profit from the price movement your swap causes, while you get a worse rate.
- Sandwich attacks: A searcher places one trade before yours and another right after it, “sandwiching” your transaction. This pushes the price up before your swap and back down after, leaving you with worse execution.
- Backrunning: A searcher spots an arbitrage opportunity created by your swap and submits a transaction right after yours to capture the price difference, before anyone else can.
How MEV can impact your swap
When you’re impacted by MEV, it means part of your swap’s value went to someone else. The most common ways MEV affects unsuspecting swappers include:
- Worse price: A searcher’s trade lands before yours and moves the price, so you get a worse executed price.
- Higher priority fee: MEV bots compete to be included first by submitting higher priority fees, which can drive up priority fee costs for you, too, in order to compete for inclusion in a block.
- Censorship: In rare cases, validators or sequencers may delay or exclude your transaction from a block.
But MEV doesn’t always have to work against you. Some platforms are rethinking how swaps are executed, and finding ways to return that value to the user.
How Uniswap Labs helps reduce MEV risk
On many decentralized exchanges, swaps are routed through the public mempool, where they’re visible to searchers and vulnerable to MEV strategies.
Uniswap Labs takes a different approach across its products:
- UniswapX, the meta-aggregator, uses an intent-based system that lets third parties called “fillers” compete to fill your order, not extract from it. That competition can result in price improvements — and that value is passed to you, not a searcher.
- The Uniswap Wallet offers a swap protection setting that allows you to send your order through private pool to help reduce exposure to frontrunning and sandwich attacks.
Tools like Uniswap Wallet and UniswapX are built to help reduce MEV’s impact, so more of your swap’s value can stay with you.
Built-in MEV protection that works
You can’t avoid MEV completely when you swap, but you can choose tools that help reduce its impact on your wallet — or may even pass that value back to you.
Swap smarter with Uniswap Wallet or the Uniswap Web App.
