What Is MEV? A Practical Guide for Safer Execution

Overview

Learn how MEV works—backrun, sandwich, arbitrage—and safer execution with private bundles.

TL;DR

• MEV = value captured from ordering/inclusion in blocks (not a guarantee of profit).
• Prefer private bundles to reduce PGA waste and exposure.
• Start with simulation + canary sizing; set strict caps.

Prerequisites

• Reliable RPC/WSS endpoints (low latency, regional proximity).
• Time sync enabled (NTP), stable network.
• Wallet ready (custody retained; never share seeds/keys).

Key points

• Clear definitions and when this topic matters for MEV practitioners.
• Step-by-step guidance you can apply inside FRB today.
• Risk notes and guardrails (no profitability guarantees).

Walkthrough

1. Setup — ensure reliable RPC/WSS endpoints and time-sync.
2. Configuration — start with simulation/canary, set slippage and budget caps.
3. Execution — prefer private bundles when available; monitor inclusion and adjust.
4. Review — log outcomes, tweak filters, and iterate conservatively.

Example

• Target: backrun a large swap on a liquid ETH/USDC pool.
• Filters: min amount, trusted router list, pool liquidity threshold.
• Execution: submit a private bundle referencing the triggering tx hash.

Checklist

• [ ] Simulation passes with expected deltas
• [ ] Slippage <= 0.5–1.0% (or strategy‑appropriate)
• [ ] Gas cap and session budget set
• [ ] Router/token not blocklisted; ABI verified

Risk & compliance

MEV is experimental and high-risk. Slippage, inclusion uncertainty and reorgs can cause losses. You are responsible for legality in your jurisdiction.

Common pitfalls

• Overfitting filters to past blocks → poor generalization.
• Ignoring reorg variance → stale assumptions.
• Running public PGAs without caps → gas burn.

Further reading

• Flashbots docs (bundles, simulation)
• Mempool/Relay reliability notes

Next steps

Use the FRB agent to scan mempools and submit private bundles with custody preserved.
→ Try FRB or watch the 2‑min demo on the homepage.