Prerequisites to Start
Coding Skills:
Master Rust/Solidity for writing MEV bots and smart contracts.
Deep understanding of EVM/SVM virtual machines.
Math & Algorithms:
Graph theory to detect triangular arbitrage loops (e.g., ETH→DAI→USDC→ETH).
Dynamic programming to optimize transaction paths.
Infrastructure:
Self-hosted node servers physically close to blockchain validators (latency <5ms).
Avoid public RPCs (too slow for MEV competition).
Monitoring Tools:
Real-time mempool scanners (e.g., EigenPhi, Blocknative) to analyze pending transactions.
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Costs & Risks
Capital Burn:
Monthly costs exceed $5k (server fees + failed transaction gas).
70% of MEV attempts fail due to latency or competition.
Brutal Competition:
Top 5% of bots capture 90% of profits (Dune Analytics 2024).
Newcomer survival rate: <3% within the first year.
Defensive Tactics:
Ordinary users: Use privacy tools like Flashbots to avoid sandwich attacks.
Projects: Implement MEV-resistant mechanisms (e.g., CowSwap).
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MEV Beginner's Guide
What is MEV?
MEV (Maximal Extractable Value) refers to hidden profits extracted by miners or arbitrageurs through manipulating transaction ordering on blockchains. It manifests in two forms:
Arbitrage: Exploiting price differences across decentralized exchanges (DEXs). For example, using flash loans (uncollateralized loans repaid within one block) to borrow $1M, profit from price gaps, and repay instantly.
Sandwich Attacks: Detecting large pending orders → front-running them to buy low → pumping the price → forcing victims to buy high → dumping immediately.