mirror of
https://github.com/autistic-symposium/mev-toolkit.git
synced 2025-08-01 02:36:20 -04:00
Update README.md
This commit is contained in:
parent
238d5477ed
commit
035710c341
1 changed files with 15 additions and 5 deletions
|
@ -4,12 +4,22 @@
|
|||
|
||||
### tl, dr
|
||||
|
||||
* lending protocol (e.g. aave or maker) liquidations present a well-known MEV opportunity. they work by requiring users to deposit some collateral. users can then borrow different assets and tokens from others depending on what they need, up to a certain amount of their deposited collateral.
|
||||
* as the value of a borrower's collateral fluctuates, if the value of the borrowed assets exceeds the value of the collateral, the protcol allows anyone to liquidate the collateral (similar to margin calls in traditional finance).
|
||||
* searchers compete to parse blockchain data as fast as possible to determine which borrowers can be liquidated and be the first to submit a liquidation transaction and collect the liquidation fee.
|
||||
* example of strategy: bot detects a liquidation opportuniy at a block and issues a liquidation tx, which is expected to be include in the next block. to compete with other liquidators, the bot sets high tx fees for their liquidation tx.
|
||||
* another strategy: bot observes a tx which will create a liquidation opportunity (e.g., an oracle price update tx rendering a collaterized debit to be liquidated), then backruns this tx with a liquidation tx to avoid the fee bidding competition.
|
||||
<br>
|
||||
|
||||
* lending protocol work by requiring users to deposit some collateral. users can then borrow different assets and tokens from others depending on what they need, up to a certain amount of their deposited collateral. as the value of a borrower's collateral fluctuates, if the value of the borrowed assets exceeds the value of the collateral, the protocol allows anyone to liquidate the collateral (similar to margin calls in traditional finance).
|
||||
* searchers compete to parse blockchain data as fast as possible to determine which borrowers can be liquidated and be the first to submit a liquidation transaction and collect the liquidation fee.
|
||||
* example of strategy: bot detects a liquidation opportunity at a block and issues a liquidation tx, which is expected to be included in the next block. to compete with other liquidators, the bot sets high tx fees for their liquidation tx.
|
||||
* another strategy: bot observes a tx that will create a liquidation opportunity (e.g., an oracle price update tx rendering a collateralized debit to be liquidated), then backruns this tx with a liquidation tx to avoid the fee bidding competition.
|
||||
|
||||
<br>
|
||||
|
||||
---
|
||||
|
||||
### in this dir
|
||||
|
||||
<br>
|
||||
|
||||
* [aave](aave.md)
|
||||
|
||||
<br>
|
||||
|
||||
|
|
Loading…
Add table
Add a link
Reference in a new issue