Why your crypto MEV arbitrage bot is not making profit right now
There are certainly bots out there making a profit right now. The reality in today’s crypto arbitrage scene, however, is that it is hyper-competitive. In this post, I will outline a few points that might make the difference between profit and no profit for arbitrage bots 🤖.
- Bot design📝
A profitable bot needs to have a good foundation. In order to compete with other bots, yours should preferably be efficient, both in time to execute and gas consumption on-chain. A lot has already been written on making arbitrage smart contracts gas-efficient, this guide is my personal favorite when it comes to MEV smart contracts.
Another part that is in my opinion equally important, is talked about way less: getting the arbitrage route. This process involves a lot of work, from getting pool prices to calculating and filtering the best trade route. A big tip, that will aid a lot with keeping your bot efficient is to query all prices of the pools you are working with in batch. This way you only need to make 1 RPC call to your web3 node, and keep your latency as low as possible.
Next, you can start to construct the trade routes. My personal approach to this is to have a token I want to arbitrage on and calculate all possible routes for this token (direct and with connector…
