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The Most Important Problem to Solve in 2023: Exclusive Orderflow

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MEV_searchers/bots/stat-arbers.md
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### statistical arbers ## statistical arbers
<br>
### tl; dr for a strategy
<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
* 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 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 realized MEV
<br>
---
### resources
<br>
* [cointegrator bots](https://github.com/go-outside-labs/blockchain-science-py) * [cointegrator bots](https://github.com/go-outside-labs/blockchain-science-py)