How to leverage Archer Swap to save on trades
What are some creative ways to use Archer Swap right now? Let’s break down three scenarios where you can save time and/or money by using the Archer Swap private network.
1. When your trade is greater than $10,000 in value
In this case you will most likely save money on a trade by using Archer Swap rather than Sushiswap or Uniswap. This is because of bots on the Ethereum network that will extract value from your ‘slippage tolerance’ when using Sushi or Uniswap. These platforms broadcast transactions to a publicly-visible holding pool before execution, and bots will see these upcoming transactions and perform a ‘sandwich attack’ where profitable. The default slippage on these platforms is 0.5%, and this is the amount of value that bots can extract from your trade. The larger the value of your swap, the more profit potential there is for bots, and the greater the likelihood of being sandwich attacked. The $10,000 mark is a general rule of thumb where sandwich attacks become profitable at 0.5% slippage ($50 is extractable), though this can be as low as $5,000 or $2,500 if your slippage is set at 1% or 2%.
Archer Swap does not have this problem because transactions are sent on a private network, and no bot can see and/or perform a sandwich attack on your trade.
For an in-depth article on sandwich attacks, click here.
Screenshot of GERO transaction log showing sandwich attacks
Source: dextools.io
You can match up the addresses of the transactions with the red man to see evidence of sandwich attacks
In the example in red, 0x32b7f…d595 sandwich extracted 0.78 ETH from 0xf090d2…b9a6
In the example in blue, 0xe58582…d13e’s 16 ETH transaction was sandwich attacked twice — 0x000000…0084 extracted 0.7 ETH, and 0xf6da21…0bad extracted 0.08 ETH
Needless to say, sandwich attacks are very common. You can see how much value has been extracted from your trades here
2. When you want to make a large sell on a coin that is dumping
This is what Vitalik Buterin has been using Archer Swap for — successfully liquidating large amounts of meme and dog coins. Owners of these coins are mainly near-term speculators that will sell if the price starts to decline. Sell pressure can increase dramatically in a short period of time, causing a rapid price decrease.
If you own $10,000 of a coin that is experiencing a lot of sell pressure, and use Uniswap to try and sell the position all at once (with default slippage at 0.5%), your trade will most likely fail. And you will have to pay a failed transaction fee, and try again at a lower price. This happens because your trade is sent to a public waiting pool (called the mempool) to be processed, and by the time it’s your turn for your trade to be executed, the token price has already decreased beyond your slippage threshold (you are being frontrun).
Error message when your transactions are being frontrun and are failing
Source: app.uniswap.org
One solution to this is to increase your slippage tolerance. If you increased it to, say, 10%, you would greatly increase the chances of completing your trade. But you would also expose yourself to being sandwich attacked.
The better solution, which is what Vitalik did, is to use Archer Swap’s private relay. This way, you can skip the public mempool and jump right to the front of the block. You essentially cut the line, greatly increasing your chances of successfully making the sale. If your trade is not successful, only you are alerted, and there is no failed transaction fee. So with Archer Swap, you can maximize your chances of completing a large sell order at the same time as everyone else is selling, without the risk of having a failed transaction fee, or exposing yourself to a sandwich attack.
3. When you want to make a big buy on a coin that is pumping (sniping)
If you want to have a first-mover advantage on buying a coin, you can ‘snipe’ transactions with Archer Swap.
Say you want to buy $5,000 of a new coin that is scheduled to be released in a few hours. The project has great fundamentals, your favorite influencer just covered it, and you think it has the potential to do a 10x. When the coin is listed on Uniswap, you try and submit buy orders, but they keep failing, and you’ve wasted a bunch of money on failed transaction fees. There are too many buyers trying to purchase! Your transactions are being sent to the public mempool, and by the time your transactions are processed, the price has passed beyond your slippage limit.
The solution to this is with Archer Swap. You can use Archer’s network to privately and securely submit your purchase order at the very front of the next block. Your trade will be ahead of everyone else’s in the public mempool. Your trade is more likely to go through, as there is no chance of being crowded out by other users. It is a red carpet, VIP trading experience. If your transaction does fail, there will be no failed transaction fee, and no one will know of your purchase attempt. You can freely submit another transaction at a higher price until your purchase is successful.
Now you can snipe the best prices on new coins to maximize your potential returns!
What’s Next?
Archer developers are working on bringing revolutionary, game-changing features to the Archer Swap platform. Stay tuned for some impressive new features that leverage Trader Extractable Value (#TEV) and privacy-enhancing features in the coming days!
