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0x30b1...765c.
Apr 03, 2024
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MEV bot creation

Hi,

How could we create a MEV bot?

I want to test it

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Andrei.
Apr 8 2024, 11:55

Well it's pretty hard to say exactly, it really depends on what you mean, so the only thing I can advise you is to make some research and het some general knowledge. To begin with I complied a couple of articles about the MEVs, whenever you have a little more clear vision on type of MEV you need I'd gladly help you! When creating a MEV bot, it's important to understand how it can be practically applied. Here are my top 4 variants:

  1. Arbitrage Trading - MEV bots monitor the Ethereum network for price discrepancies between different DEXes and execute transactions that capitalize on these differences. For example, if the price of a specific token is lower on one DEX than another, the MEV bot can swiftly execute a buy order on the lower-priced exchange and a sell order on the higher-priced exchange to profit from the price difference .

  2. MEV bots can also employ front-running strategies, where they observe pending transactions and quickly submit their own transactions with higher gas fees to get executed before the original transactions. This allows the bot to capitalize on anticipated market movements and profit from the price changes caused by the original transactions. (so called Front-running strategy, however I am not a big fan although it's pretty popular)

  3. Execution of sandwich trades.MEV bot identifies a large transaction on a DEX, places its own transactions strategically before and after the large transaction, and profits from the price impact caused by the large trade. This strategy allows the bot to extract value from the price movements triggered by the initial transaction .

  4. The last one I found on-line but actually I did not try it on my own. MEV bot can utilize flash loans to temporarily borrow assets, perform a series of transactions, and repay the loan within the same transaction + they can engage in liquidation strategies, taking advantage of distressed assets on decentralized platforms to extract value from market inefficiencies .

These practical examples showcase how MEV bots operate on the Ethereum blockchain and illustrate the various strategies they employ to extract maximal value from transactions. By understanding these real-world applications, you can gain insight into the potential capabilities and impact of MEV bots in the context of Ethereum trading. If you have any more questions or need further guidance on specific aspects of creating and implementing MEV bots in Ethereum, feel free to ask!

Once again : I need more info to give you specific example but if we ae speaking in general and highly theoretically here are the steps to become a person who can create a MEV bot for Ethereum trading:

  1. Firstly, familiarize yourself with the concept of MEV and its application in the Ethereum blockchain. Understand how MEV bots operate and decide on what exactly you want to build, just make a little research.

  2. If you want ot write the bot on your own learn some blockchain basics (if you are not familiar) and Smart Contracts MEV bots often interact with smart contracts to execute their strategies, so familiarity with these concepts is crucial (make sure you know what is EVM and how they opperate) .

  3. I assume that on the previous step you've done that but generally just take some time to learn Solidity. It's a very useful thing to know in general.

  4. Now you can code your bot, can't give you a hand here, don't have much information, just think of your strategy and use everything you've learnt to build a bot according to the strategy you prefer.

  5. Once you are confident in the bot's performance (don\t forget about testing before), you can deploy it on the Ethereum Mainnet and begin monitoring its operation. It's important to keep a close eye on its activities and continuously refine its strategies for optimal performance.

Here are also some articles to read:

https://www.blocknative.com/blog/mev-and-creating-a-basic-arbitrage-bot-on-ethereum-mainnet

https://www.tastycrypto.com/defi/mev-bots/

https://antematter.io/blogs/how-mev-bots-work

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