The core of MEV lies in transaction order and selective transaction packaging. Each block in the blockchain usually contains multiple transactions, and miners (or validators) have the right to decide the order in which these transactions are packaged. By changing the order of transactions, prepending certain transactions, or deleting certain transactions, miners can extract more profits from them. The following are several common ways to extract MEV:

Front-running: Front-running is a strategy of initiating one’s own transaction before the transaction is executed by other users. For example, on a DeFi platform, a user may submit a large transaction in an attempt to influence the market price (such as a large transaction on a decentralized exchange). Miners can preemptively execute a profitable transaction by prepending the transaction, and then gain benefits through the market changes of the transaction.

Back-running: Back-running refers to a transaction that a miner executes immediately after executing a transaction. For example, a miner can wait for a transaction (such as a large transaction) to affect the market price before executing a transaction to gain profits.

Flash Loans: Flash loans are a form of lending that does not require any collateral and is often used to execute arbitrage strategies. Borrowers can borrow a large amount of money within a block, perform various operations within the same block (such as arbitrage, liquidation, etc.), and then return the loan and make a profit. Flash loans are closely linked to MEV because they allow miners to extract value from market imbalances or price spreads by performing high-frequency operations without capital investment.

Transaction “deletion” or “reordering”: Since miners have control over the ordering of transactions in a block, they can selectively delete certain transactions (for example, those that may bring competition) or reorder them so that certain transactions can be executed first, thereby increasing their own returns.

These actions usually involve precise control of transaction timestamps and execution order, which allows miners or validators to maximize some potential value in the transaction chain.