Weekly update on development process (Jun 20, 2022)
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- 🤝 Advised the Mars Fellows project.
- 🤝 Advised another project (stealth mode).
- 🧠 Researched MEV opportunities.
MEV is a very interesting market:
- It’s unique — doesn’t have a historical analog. The closest sibling is the “traffic arbitrage” market in advertising, but MEV has a much wider scope.
- It’s niche but rich — a small amount of people are making a lot of money.
- It’s fast-converging — every bot that implements sandwich attacks works very similarly.
- It’s highly competitive — since the bots are similar, they have to compete on price.
- It’s temporary (at least some forms) — the users have already started using services that protect against sandwich attacks.
It looks like the volume of current MEV opportunities will decrease in future, since the users will start protecting themselves. However, new forms of MEV might arise if new technology comes along.
It’s questionable who makes the most profit: the miners or the bot operators. The Flashbots dashboard says that operators hold 65% of the profit. However, we’ve personally checked some of the recent transactions, and they give 95%+ to the miners. In the long run, it looks like the bot evolution will converge, and they will only compete on price. Therefore, miners will receive the largest share of the profit.
Next week’s focus
- 🤝 Advise current projects.
- 🤝 Increase our network & strengthen existing connections.
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