diff --git a/private_order_flows/README.md b/private_order_flows/README.md index b604454..8bcd2eb 100644 --- a/private_order_flows/README.md +++ b/private_order_flows/README.md @@ -1,10 +1,13 @@ -## MEV private order flows solutions +## private order flows solutions +
#### private order flow protocols (POFPs) +
+ * rpc-based mev solutions (private order flow) -* private orderflows are realized by modifying either the user's rpc or by modifying the protocol's frontend +* private order flows are realized by modifying either the user's rpc or by modifying the protocol's frontend * the goal of private order flow protocols (POFPs)
@@ -24,13 +27,15 @@ ### stat arbs -* if CEX is greater than the price on chain (on theDEX), stat arbs will buy on the DEX and hedge on the CEX -> confident that the DEX price will drift towards the CEX price, but not confident that will happen to the CEX price +
+ +* if CEX is greater than the price on chain (DEX), stat arbs can buy on the DEX and hedge on the CEX -> confident that the DEX price will drift towards the CEX price, but not confident that will happen to the CEX price * problem: settlement mismatch -> CEX trades are fast but blockchains aren't -> start arbs are unsure if the trade will land or competitors will beat them * from the time between trade submission and receipt of the next block, the trade (their exposure to the assets) is uncertain * the greater the uncertainty, the more the profit estimate needs to be marked down -* while volatility of the token is important, the longer the time period between blocks, the longer tx remains, and the longer can go without being fully hedged +* while volatility of the token is important, the longer the time period between blocks, the longer tx remains, and the longer it can go without being fully hedged * as block time increases, stat arb MEV profit estimates get marked down -> payments made by stat arbers to miners/validators or to users/traders decrease -* conclusion: the battle between PFOF-style MEV could lead to increase block times for stat arbers, decreasing combined realzied MEV +* conclusion: the battle between PFOF-style MEV could lead to increase block times for stat arbers, decreasing combined realized MEV
@@ -38,6 +43,8 @@ #### resources +
+ * [private order flow and the block builder market, by jon charbonneau](https://twitter.com/jon_charb/status/1562916372505665536) * [ethereum's biggest issue no one's talking about](https://mariusvanderwijden.github.io/blog/2022/10/21/lightclients/)