What Is MEV and How Does It Work in Solana

9 min readMay 28, 2025

Maximal Extractable Value (MEV) is a dynamic concept in blockchain ecosystems related to how transactions are ordered and processed. At first, it was associated with Ethereum’s Proof-of-Work system, but it has evolved beyond miners, playing a significant role in various blockchain networks, including Solana.

Understanding MEV

MEV, short for Maximal Extractable Value, refers to the additional profit network participants can earn by manipulating the order of transactions within a block. When Ethereum operated on a Proof-of-Work consensus mechanism, miners controlled transaction sequencing, so this concept was initially called “Miner Extractable Value.”

The Ethereum Connection

Ethereum’s early blockchain structure allowed miners to decide which transactions to include, exclude, or rearrange in a block. This meant they could maximize profits by front-running, sandwich attacking, or arbitraging transactions. Regular users had no defense mechanism against these practices and were even required to pay gas fees to miners for validating their transactions, adding to the unfair advantage.

However, miners were not the only ones capitalizing on MEV. Independent participants known as “searchers” also leveraged Ethereum’s transparent mempool — where pending transactions are visible — to strategically execute transactions based on potential profits. Since MEV was no longer exclusive to miners, the term evolved from “Miner Extractable Value” to “Maximal Extractable Value.” Despite this change, both terms are still used interchangeably.

MEV remains an essential element of blockchain economics, influencing transaction prioritization, gas fee dynamics, and overall network fairness. With Ethereum’s shift to Proof-of-Stake and Solana’s different transaction processing model, MEV has adapted to new conditions and continues to shape the user experience and market strategies within blockchain networks.

How Does MEV Work?

Blockchain networks like Bitcoin and Ethereum operate as immutable ledgers secured by decentralized block producers. These block producers include miners in Proof-of-Work (PoW) blockchains and validators in Proof-of-Stake (PoS) networks. They’re responsible for aggregating pending transactions into blocks, validating them, and appending them to the blockchain. However, while blockchain networks ensure all transactions are valid and continuously processed, they don’t guarantee that transactions will be ordered exactly as they were submitted.

Since each block has a finite capacity, block producers have discretion over which pending transactions from the mempool — the off-chain storage for unconfirmed transactions — they choose to include. Typically, transactions are ordered based on gas fees, with those paying higher fees getting priority. However, this isn’t a strict requirement, allowing block producers to manipulate transaction orders for additional profit, leading to the extraction of MEV.

By default, transactions aren’t necessarily ordered by their time of submission but rather by the fees paid. This means that block producers can prioritize their own transactions, exclude certain transactions, or reorder them to maximize their own gain. This ability gives rise to various MEV strategies such as front-running, sandwich attacks, and arbitrage.

Due to the technical expertise and resources required to extract MEV, many block producers outsource block creation to specialized third-party participants, including searchers. These searchers identify MEV opportunities and create transaction bundles that often contain other users’ transactions. This layered approach allows for more efficient MEV extraction while decentralizing its execution across multiple participants, highlighting the diverse roles within the blockchain ecosystem.

MEV frequently comes at the expense of regular users, often in subtle ways. For example, traders might experience unfavorable price execution due to front-running, where a searcher anticipates and exploits their trade before it’s finalized. This indirect cost affects market fairness and user experience, making MEV contentious in blockchain ecosystems.

Types of MEV

MEV can be extracted through various strategies with different implications for network users. While the list of MEV techniques is continually evolving, some of the most well-documented types include:

Front-Running and Sandwich Attacks

Front-running occurs when bots monitor pending transactions in the public mempool and place their transaction ahead of a user’s trade. This is especially common on decentralized exchanges (DEXs), where large transactions can significantly impact asset prices. Searches can profit from the price shift by executing a trade before the user’s transaction and then selling the asset after the user’s trade is processed.

A more aggressive variant, a sandwich attack, involves placing two trades — one before and one after the user’s transaction — to exploit price movements further, causing users to suffer increased slippage and worse trade execution.

2. Exchange Arbitrage and Liquidations

Arbitrage is another common form of MEV, where bots identify price discrepancies between different exchanges and exploit them for profit. When an asset is priced lower on one exchange than another, bots quickly buy from the lower-priced exchange and sell on the higher-priced one, profiting from the difference. This activity can occur across decentralized exchanges, between DEXs and centralized exchanges, or even across different blockchain networks (cross-domain MEV).

Similarly, bots actively monitor DeFi lending protocols for liquidation opportunities, quickly repaying undercollateralized loans and seizing the borrower’s collateral for profit.

3. Generalized Front-running

A more advanced form of MEV extraction is generalized front-running, where bots scan transactions in the mempool and duplicate them with higher transaction fees to ensure their execution first. These bots do not necessarily analyze the transaction logic but simply replace the original user’s address with their own, effectively stealing profitable opportunities from other participants. This has been observed even in security-related scenarios, such as white-hat hacks intended to recover at-risk funds, only for a generalized front-runner to intercept and execute the transaction first for their own gain.

While some forms of MEV, like arbitrage, contribute to market efficiency, others, like sandwich attacks and generalized front-running, exploit users and increase costs. Understanding these implications makes the audience aware of the potential risks and benefits of the blockchain ecosystem.

How MEV Works in Solana

Solana’s high-speed architecture reduces some MEV risks but introduces new challenges. The network’s unique design — featuring Proof-of-History (PoH), Tower BFT, and a priority fee system — creates distinct MEV opportunities. The priority fee system, in particular, plays a significant role in how MEV is extracted in Solana. Various solutions, such as Jito Labs’ infrastructure, scheduler optimizations, and decentralized sequencing, aim to mitigate MEV risks while maintaining Solana’s efficiency.

How Solana’s Design Enables MEV

Let’s go over some of Solana’s key characteristics that enable MEV:

Proof-of-History (PoH) and MEV

PoH timestamps transactions to ensure an ordered sequence. While this transparency helps reduce uncertainty, MEV traders can use it to predict execution order and strategically position transactions. The high speed of PoH also benefits high-frequency arbitrage strategies, where traders execute transactions faster than competitors.

Tower BFT and MEV

Solana’s consensus mechanism, Tower BFT, reduces network delays by minimizing validator communication overhead. This efficient process makes transaction ordering more predictable, allowing MEV traders to anticipate price movements and optimize their strategies.

Priority Fees and Transaction Sequencing

Solana’s two-tier fee system — base fees and priority fees — lets users bid for transaction priority. MEV traders pay higher fees to ensure their transactions are executed first, creating an auction-like competition for ordering. This system functions similarly to Ethereum’s gas wars but lacks a built-in burn mechanism like EIP-1559, making fee manipulation more prevalent.

Concurrent Block Production and Arbitrage

Solana’s concurrent leader scheduling allows multiple validators to propose blocks simultaneously. This enhances transaction throughput but also introduces competition in transaction ordering. MEV traders exploit timing differences between leaders to execute arbitrage strategies. When leaders produce blocks in parallel, some transactions may be included faster in one block than another, creating short-lived price discrepancies.

MEV Solutions on Solana

Solana’s ecosystem is actively developing solutions to reduce MEV risks while preserving network efficiency. These include infrastructure optimizations, private transactions, and decentralized sequencing.

Jito Labs: MEV Infrastructure Provider

Jito Labs provides essential tools for MEV infrastructure on Solana.

Jito-Solana Validator Client: A modified validator software that supports transaction bundling, allowing MEV searchers to submit multiple transactions together. This reduces unnecessary spam transactions, making MEV extraction more efficient.
Jito Block Engine: An off-chain auction system where searchers bid for transaction inclusion. This ensures that MEV profits are partially redistributed to validators and stakers instead of being captured solely by traders.
MEV Dashboard: A real-time monitoring tool that tracks MEV activity, giving validators and users insights into network conditions.

By offering structured MEV opportunities, Jito reduces chaotic bidding wars and ensures fairer competition.

2. Scheduler Optimization for Fairer Transaction Ordering

Solana’s upcoming scheduler upgrade (v1.18) aims to improve transaction priority ranking and reduce front-running risks.

Deterministic Processing: The new scheduler reduces inconsistencies in multi-threaded transaction processing, which previously led to race conditions that MEV traders could exploit.
Stronger Coordination Across Threads: The update enhances synchronization between processing units, preventing malicious transaction reordering.

By improving how transactions are scheduled, this optimization limits MEV traders’ ability to manipulate order execution.

3. Privacy Enhancements to Combat MEV Attacks

Solana is exploring private transactions to prevent front-running and sandwich attacks.

Encrypted Transactions: By encrypting transaction details before execution, attackers cannot analyze pending transactions to manipulate prices.
Private Transaction Pools: Similar to Ethereum’s Flashbots, this would allow users to send transactions privately, preventing MEV bots from detecting profitable opportunities before execution.

These privacy mechanisms significantly reduce the likelihood of users being exploited by MEV bots.

4. Decentralized Sequencing for Fairer Block Inclusion

Solana is working on independent sequencing services to reduce MEV manipulation.

Randomized Transaction Ordering: By introducing elements of randomness, validators cannot easily prioritize certain transactions for personal gain.
Lower Reliance on Priority Fees: Adjusting validator incentives ensures they are less dependent on extracting MEV profits, leading to fairer block production.

Decentralized sequencing prevents validators from selectively ordering transactions to benefit specific traders, reducing unfair MEV opportunities.

The Bottom Line

MEV remains a challenge for Solana, but innovative solutions are being developed to balance performance, fairness, and security. While its high throughput and low latency make Solana a prime target for MEV strategies, efforts like Jito’s infrastructure, improved transaction scheduling, privacy tools, and decentralized sequencing help mitigate risks.

As Solana’s network grows, maintaining fair transaction processing while supporting high-performance DeFi will be crucial. Ongoing improvements will shape how Solana handles MEV in the future, striving for a more efficient and equitable blockchain ecosystem.

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Disclaimer: Not financial advice. Cryptocurrency and blockchain investments are high risk, can incur substantial losses, and are not suitable for everyone. Please consult a professional before considering investment in any cryptocurrency. This article does not encourage or support any specific investments, use of applications or technology, or financial direction. This article is for informational purposes only and should be verified and validated externally for 100% accuracy.