From fdb092933541b2c83b42bcb56bdf997bfc30084a Mon Sep 17 00:00:00 2001
From: bt3gl <1130416+bt3gl@users.noreply.github.com>
Date: Sun, 3 Apr 2022 07:23:21 +0100
Subject: [PATCH] Create MEV_at_KeeperDAO.md

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 keeperDAO/MEV_at_KeeperDAO.md | 47 +++++++++++++++++++++++++++++++++++
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 create mode 100644 keeperDAO/MEV_at_KeeperDAO.md

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+## MEV at KeeperDAO
+
+<br>
+
+* MEV refers to profit that can be extracted from a transaction from the transaction originator needing priority or control over the ordering of that transacion in a block (*the arbitrage has 45 WETH of MEV*).
+* [As may of 2021, around $3-4mil of MEV is being captured daily](https://explore.flashbots.net/).
+* MEV exists on any blockchain and layers where there is a party responsible for transaction ordering (eg. validators, rollup providers).
+* Extracted MEV = Successful MEV transactions + Successful MEV transactions gas fees + Failed MEV transactions gas fees
+* Common MEV strategies are front-running, back-running, and sandwiching.
+* MEV should accrue to the originator of the transaction, or of the transactions or protocols that create the MEV in the first place.
+* Using KeeperDAO's **coordination layer**, we can capture and recycle the MEV before it can be extracted.
+
+<br>
+
+### Arbitrage opportunity
+
+* Results from a difference in prices between the same asset, listed on different DEXes.
+* A transaction that makes the right swaps along the right arbritage route will end up with profit.
+
+
+### Keepers
+
+* Bots observe Ethereum, and other blockchains, to faciliate sorts of transactions, such as arbitrage, liquidations, auctions.
+* Automated agents that survey the state of the blockchain and compute all the different possibilitie in order to identifty transactions that can create profit.
+* Once Keepers have identified a valuable transaction, they will broadcast that to the network. Other keepers can copy and broadcast the same transaction with themselves as the originators.
+* MEV arises from the problem of "how can a keeper ensure that they are the one who gets a transaction settled first?
+* Keepers compete with each other in a zero-sum game, transforming Ethereum into a highly zero-sum game.
+* Inside KeeperDAO, keepers don't need to compete - but coordinate and capture on-chain profits efficiently. DeFi users, protocols, market makers can bring their activity to KeeperDAO and gain a portion of the profits as a reward.
+
+
+
+<br>
+
+### ➡️ MEV poses risks not only to the user but also to the consensus layer itself. The reorganisation of blocks, the reordering of transactions, and — even momentarily — the censorship of transactions can have profound impacts on the blockchain and breaks the assumptions of many applications.
+
+### ➡️ Because block producers are able to prioritize transactions with higher gas fees, a bidding war between bots (who either try to arbitrage or front-run) can occur. This hurts ordinary users and DeFi platforms, because these bidding wars drive up gas fees (Priority Gas Auctions) and cause slippage and failed transactions
+
+
+
+<br>
+
+#### Gas golfing
+
+* use addresss that start with a long string og zeroes (take less space, less gas, to store)
+* leaving small ERC-20 token balances in constracts since it cost more gas to initialize a storage slot then to update a storage slot
+
+