Ethereum Arbitrage MEV Bot for Beginners
Arbitrage is still profitable in crypto.
Arbitrage is still one of the most profitable MEV strategies.
The basic idea: you swap token A for token B on Exchange 1, and then swap token B for token A on Exchange 2 where it's cheaper, profiting from the difference.
Let's have a look on how to start.
MEV 101 - here we go!
If you're looking especially for Ethereum arbitrage, i.e. mainnet on-chain swaps betweet exchanges like Uniswap and SushiSwap, then @blocknative has a great text on how to start:
They also include examples of code: blocknative.com/blog/mev-and-c…
But on-chain DEX to DEX arbitrage is only one type of arbitrage.
You have also centralized exchanges like Binance, OKX & many more than also have varied prices.
@CryptoRank_io has a chart for that.
Just look at how different ETH prices are across exchanges.
So before jumping into arbitrage you have to choose a type of arbitrage you want to do:
- only DEX (onchain)
- DEX-CEX (e.g. Uniswap to Binance)
- CEX-CEX (e.g. Binance to OKX)
and that's not all!
Another type of arbitrage is cross-chain arbitrage where you try to do swaps across chains.
This works especially on various EVMs where compatibility is built-in.
Here Odos Protocol can help you with identifying opportunities via their live dashboard.
If you want to learn about the next-generation of arbitrage and MEV then there's a great text by @0xsamgreen, cofouder of @odosprotocol: medium.com/semioticai/not…
How much opportunity is still in arbitrage MEV bots?
A LOT!
There's an interesting paper on how the ecosystem looks like.
The authors have found over $300m profit to be taken over the last 28 months.
That's more than $10m arbitrage opportunities each month.
Just on Ethereum. No cross-chain, no DEX-CEX arbitrage!!
This is HUGE!
Funny enough, they have created their own arbitrage bot too.
You can find it here on Github.
Of course here I should mention: do not trust any MEV bot code you find online!
No one will give you a money-making tool!
Finally I have to mention @EigenPhi which is an amazing tool for analyzing how on-chain MEV bots behave.
Not only you can see that they did $10m in profit on Ethereum last month.
You can see each transaction too!
If you want to learn more about Arbitrage, watch my recent video tutorial here:
I explain what is MEV, what is arbitrage and show various opportunities.
Also write me if you're thinking about building your own arbitrage bot.
Great tech skills required!
I can probably help you with identifying some opportunities.
If you’re looking to learn more about MEV in general, see my full guide here.
I did multiple videos about MEV.
You’re going to find each on https://pccrypto.co/mev-arbitrage/
Thanks for reading, and don’t forget to subscribe!