Maximal Extractable Value (MEV) is the function of monetization present in blockchain networks. Network participants in charge of processing transactions, miners or validators, order their selection and execution. This architecture allows MEV bots to profit from price discrepancies (arbitrage).

For example, an MEV arbitrage bot could be deployed to monitor trades on decentralized exchanges (DEXes). If there is an incoming large buy order in play, this will point toward the price increase of a particular cryptocurrency.

When identifying such a sizeable incoming trade, the MEV bot executes its order. This way, it would take advantage of the price shift likely resulting from the DEX order. The MEV bot would typically place a buy order at a lower price just moments before the DEX order is executed.