diff --git a/liquidations/README.md b/liquidations/README.md index 911e282..bf87c80 100644 --- a/liquidations/README.md +++ b/liquidations/README.md @@ -13,3 +13,16 @@ * If liquidated, the borrower usually has to pay a hefty liquidation fee, some of which goes to the liquidator (where the MEV opportunity comes in). * 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. + +
+ +### strategy 1 + +* A detects a liquidation opportuniy at block B (after the execution of B). Then, A issues a liquidation transaction T, which is expected to be mined in the next block, B+1. +* A attempts to destructively front-run other competing liquidators by setting high transactions fees for their liquidation transaction T. + +
+ +### strategy 2 + +* A observes a transaction T, which will create a liquidation opportunity (e.g., an oracle price update transaction which will render a collaterized debit liquidatable). A then back-runs T with a liquidation transaction Ti to avoid the transation fee bidding competition.