Mempool
The 'memory pool' — a holding area where unconfirmed transactions wait before being included in a block by miners or validators. Each node maintains its own version of the mempool. Transactions with higher fees are typically prioritized, which is how MEV searchers and front-runners identify profitable opportunities.
“During periods of high network congestion, the Bitcoin mempool can grow to over 100,000 pending transactions. Transactions offering lower fees may wait hours or days for confirmation.”
Transaction Fee
A payment made to network validators or miners for processing and confirming a transaction on the blockchain. Fees incentivize block producers and prevent network spam. Fee structures vary by blockchain — Bitcoin uses a fee market based on transaction size in bytes, while Ethereum uses gas-based pricing. During congestion, fees increase as users bid for limited block space.
Block
A collection of transactions bundled together and permanently added to the blockchain. Each block contains a timestamp, transaction data, a reference (hash) to the previous block, and a nonce. This chaining of blocks through cryptographic hashes is what makes the blockchain tamper-resistant.
MEV (Maximal Extractable Value)
The maximum value that can be extracted from block production beyond standard block rewards and gas fees by including, excluding, or reordering transactions within a block. MEV is extracted by validators and specialized 'searchers' who identify profitable opportunities like arbitrage, liquidations, and sandwich attacks. The MEV ecosystem has evolved to include builder-searcher separation (MEV-Boost) to reduce negative externalities.
Gas
A unit measuring the computational effort required to execute operations on the Ethereum network. Users pay gas fees in ETH to compensate validators for processing transactions. Since EIP-1559, gas fees consist of a base fee (burned) and an optional priority fee (tip) to incentivize faster inclusion.