From acdcd2f8628fadd951c26329f808d38fa7ea3064 Mon Sep 17 00:00:00 2001 From: "dr. mia von steinkirch, phd" <1130416+mvonsteinkirch@users.noreply.github.com> Date: Tue, 14 Feb 2023 07:53:55 -0800 Subject: [PATCH] Update README.md --- MEV_strategies/arbitrage/README.md | 8 +++++--- 1 file changed, 5 insertions(+), 3 deletions(-) diff --git a/MEV_strategies/arbitrage/README.md b/MEV_strategies/arbitrage/README.md index e00b811..3a36442 100644 --- a/MEV_strategies/arbitrage/README.md +++ b/MEV_strategies/arbitrage/README.md @@ -7,8 +7,10 @@
-* in tradefi, arbitrage refers to buying something in one venue and selling it in another (through a series of intermediate transactions) for a higher price. this is note risk-free as prices can move mid-transaction. -due to the nature of the evm's atomic execution, **atomic arbitrages** are possible (as opposed to tradefi): smart contracts allow the packaging a sequential execution of txs, for a set of conditions. if the conditions are not met, the execution can fail, undoing all the on-chain interactions that just occurred. +* in **tradefi**, arbitrage refers to buying something in one venue and selling it in another (through a series of intermediate transactions) for a higher price. this is note risk-free as prices can move mid-transaction. + +* due to the nature of the evm's atomic execution, **atomic arbitrages** are possible (as opposed to tradefi): smart contracts allow the packaging a sequential execution of txs, for a set of conditions. if the conditions are not met, the execution can fail, undoing all the on-chain interactions that just occurred. + * since **liquidity on-chain is fragmented** (thousands of pools don't communicate with each other, each providing quotes for swapping assets in real-time), it creates an opportunity to buy low and sell high across different pools. for example, two DEXes offer a token at two different prices so that a token can be bought at the lower-priced DEX and sold on the higher-priced DEX in a single atomic transaction. * **non-atomic (cross-chain, CEX/DEX, etc.) arb** are more profitable and less accessible due to capital requirements and risk profile. @@ -29,7 +31,7 @@ due to the nature of the evm's atomic execution, **atomic arbitrages** are possi ---- -### resources +### links