mev-toolkit/MEV_strategies/sandwich
dr. mia von steinkirch, phd afac2988aa
loss and slippage in amms
2023-02-10 17:19:56 -08:00
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interesting_examples.md 💾 2023-02-08 09:08:45 -08:00
README.md loss and slippage in amms 2023-02-10 17:19:56 -08:00

sandwiching


tl, dr


  • sandwiching occurs when a searcher identifies a profitable trade in the mempool that will cause an impact on the price of an asset.

  • a searcher buys or sells a calculated amount directly before the large trade is executed and then immediately exits their position after the large order has taken place, banking a profit.

  • the main theme of sandwich attacks is the deterministic price slippage caused by available liquidity in the pool, which is deterministic . slipage is the change in the price of an asset during a trade.

  • sandwiches (and most frontruns) are often labelled toxic mev because the tx that is frontrun either executes at worse conditions or fails to execute.

  • a softer side of sandwich is on the lens of economic efficiency, on which an order can create a consumer surplus and the absence of a nash equilibrium. the bot operator would love the economic system back.



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