⚡️🤖🧱⛓ Stateful Blockchains, MEV, and Flashbots [Scratch Space]

• This repository contains my notes, scripts, code through my journey into stateful blockchains and miner profit.

• Flashbots maintains a proof-of-concept communication channel for users to send their Ethereum transactions directly to miners.

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Episodes

• Chapter I: geth and running an Ethereum node
• Chapter II: The Mempool and MEV
• Chapter III: Flashbots
• Chapter IV: Flashbots bundle

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Code

• PoCs having geth in Docker and K8s

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Further references

• Flashbots PM
• Etherscan data on flashbots
• MEV Dashboard by Flashbots.
• Sandwiched?

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Terminology

• Mempool: the set of pending, unconfirmed transactions in the EVM.
• MEV: Maximal (or miner) Extractable Value
• Frontrunning: also known as Priority Gas Auctions (PGAs), when a miner steals a profitable opportunity (such as arbitrage) for themselves by sending the same transaction with a higher gas price. For example, a transaction A is broadcasted with a higher gas price than an already pending transaction B so that A gets mined before B (eg. to snatch a Uniswap price arbitrage trade to rebalance a pool).
• Backrunning: a transaction A is broadcasted with a slightly lower gas price than already pending transaction B so that A gets mined right after B in the same block. (eg. to execute a DyDx liquidation after a price oracle update that triggers a DyDx loan to go under the required collateralization ratio).
• Sandwiching: profiting off slippage in liquidity pools by buying and selling before and after large transactions posted in the mempool.
• DEX arbitrage: If two DEXes are offering a token at two different prices, one can buy the token on the lower-priced DEX and sell it on the higher-priced DEX.
• Liquidations: if the value of a borrowed asset exceeds the collateral, anyone can liquidate the collateral and collect the liquidation fee for themselves.