MEV stands for Maximal Extractable Value—it's the profit a block producer or validator can make by reordering, inserting, or excluding transactions in a block. Think of it like someone cutting in line at a deli counter and knowing exactly what everyone ordered before they do.
When you submit a transaction to the mempool, it sits there visible to everyone. Sophisticated actors called searchers can see your pending trade, execute their own trade first to profit from your incoming transaction, then let yours go through at a worse price. This is called a sandwich attack, and it costs everyday traders real money.
The issue is particularly bad on Ethereum and Solana during high-volume periods. Your slippage settings only protect you so much—a searcher might extract value that your wallet thought was acceptable. Some solutions exist like private mempools and MEV-resistant protocols, but they come with tradeoffs like higher fees or slightly longer confirmation times.
You can't eliminate MEV entirely, but understanding it exists helps you use limit orders instead of market orders and choose exchanges that minimize it.