Git-Mirrors/mev-toolkit
1
0
Fork 0
mirror of https://github.com/autistic-symposium/mev-toolkit.git synced 2025-04-28 11:46:13 -04:00
Code Issues Packages Projects Releases Wiki Activity

Update README.md

Browse Source
This commit is contained in:
dr. mia von steinkirch, phd 2023-02-07 17:38:41 -08:00 committed by GitHub
parent 23c105af13
commit 95920f41e7
No known key found for this signature in database
GPG Key ID: 4AEE18F83AFDEB23
1 changed files with 12 additions and 5 deletions
Show Stats Download Patch File Download Diff File Expand all files Collapse all files

17
private_order_flows/README.md
View File

@ -1,10 +1,13 @@
## MEV private order flows solutions ## private order flows solutions
<br>
#### private order flow protocols (POFPs) #### private order flow protocols (POFPs)
<br>
* rpc-based mev solutions (private order flow) * 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) * the goal of private order flow protocols (POFPs)
<br> <br>
@ -24,13 +27,15 @@
### stat arbs ### 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 <br>
* 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 * 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 * 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 * 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 * 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
<br> <br>
@ -38,6 +43,8 @@
#### resources #### resources
<br>
* [private order flow and the block builder market, by jon charbonneau](https://twitter.com/jon_charb/status/1562916372505665536) * [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/) * [ethereum's biggest issue no one's talking about](https://mariusvanderwijden.github.io/blog/2022/10/21/lightclients/)