What is Maximal Extractable Value (MEV)?

Maximal Extractable Value (MEV) is a measure of the potential profits that can be gained by exploiting inefficiencies in decentralized finance (DeFi) protocols on the Ethereum blockchain. It refers to the maximum amount of money that can be made by manipulating smart contracts, such as through front-running or liquidity provisioning, without causing the system to collapse. MEV is an important concept in DeFi as it highlights the potential vulnerabilities in these protocols and the need for governance and risk management mechanisms to prevent abuse.