Order Flow Auction
A mechanism where rights to execute or route user order flow are competitively allocated.
Explain Like I'm 12
A mechanism where rights to execute or route user order flow are competitively allocated.
Why It Matters
MEV concepts explain how transaction ordering can create economic opportunities and risks.
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Related Terms
Block Builder
A specialized participant that constructs candidate blocks or transaction bundles for proposers.
Mempool
The mempool, or memory pool, is a temporary staging area where unconfirmed transactions reside before they are selected by a validator or miner to be included in a blockchain block. It acts as a gateway for transactions entering the network. Each node maintains its own local version of the mempool, where transactions are validated against network rules before propagation. As block space is limited, competition for inclusion often leads to users paying higher transaction fees to prioritize their transactions within the mempool, a process known as fee-based prioritization.
Searcher
An actor or automated system that identifies and submits transaction bundles designed to capture MEV opportunities.
Transaction Ordering
The rules or mechanism determining the sequence in which pending transactions are included and executed.
Back-Running
An MEV strategy where a transaction is deliberately placed immediately after a target transaction to capture an opportunity.
Front-Running
The practice of placing a transaction before a known pending transaction to profit from or alter its expected execution.