DEX Labs CEO: MEV is Driving Institutional Investors Away from DeFi

Jinse Finance reported that Maximum Extractable Value (MEV) refers to the process by which miners or validators reorder transactions within a block to extract profits. This hinders the adoption of decentralized finance (DeFi) by financial institutions and harms the interests of retail users. Aditya Palepu, CEO of DEX Labs, stated that DEX Labs is the main contributor to DerivaDEX, a decentralized crypto derivatives exchange. All electronic trading markets have issues with maximum extractable value or similar problems, which stem from information asymmetry in the ordering of trading data. Due to the lack of transaction privacy, financial institutions cannot adopt DeFi, as this exposes them to risks of market manipulation and front-running, since transactions are made public before execution.