Ehh yoo, welcome back to my substack! Let’s pick up from where we left off yesterday:
Next steps: flahboys summary, complete summarising the mev doc, get your hands fkn dirty. Also, compile a list of MEV chads on twtitter.here
Today was a sort of eventful day that took a slight emotional toll on me (the type of days where you get your hopes up and down and up and down 😅). The agenda was to get my hands dirty, and considering I am a full-on Level 100 MEV noob, I thought the best way to do so would be via doing some manual arbitrage by hand.
At first, I tried arbing spookyswap and spiritswap, and there was indeed a price difference (buy SOUL from spooky and sell on spirit) however I did this twice and not only did I not make profit, but I actually went in negative. Ok, the price difference was less (<1%) so it’s fine, stuff like tx fee and slippage would’ve ate it up.
However, later on in the day, I found SoulSwap which is another DEX on the FTM chain, and had had someone tell me they did a 3-way arb there (i.e. asset 1 → asset 2 → asset 3 → asset 1) which was profitable. I went there myself and did this—on paper in my calculation it showed a 20% profit in asset 1.
Knowing not to get fooled, I calculated the minimum to minimum amount I felt I would get, subtracting all transaction fee, approval fee, etc. from my supposed profit. In this way, I realised I should be at least 10% in profit, if not more. I should be in profit.
Obviously got my hopes too high as when I was finishing the trip (finally changing Asset 3 to Asset 1) I realised I now had less of the Asset 1. Clearly, something went wrong here. This made me feel a little sad, because I couldn’t figure why this happened.
Some theses: since it was a small DEX, I feel every trade I made affected the price. Maybe this took my edge away, since we know how every tx impacts prices. So now I have learnt some things for when I make a bot—we need to be very careful about calculating the net ROI of the bot, and do so by considering all costs—tx costs, swap costs, loan payment interest costs, price impact due to trades, etc. Lesson learnt.
Then, after this I lurked in the Flashbots discord where I went through a channel of nerds talking about how “mev is over” and a channel for newcomers wanting a “hand-holding guide to mev”. This made me feel weird, but also I ended up making some cool friends from this place so that was awesome.
The arbitrage was unsuccessful but I (lurked and) learnt a lot. Interestingly had lots of ppl hit me up asking for help like bro I myself don’t know. I hope these people stick around, right now the energy is like “markets arent doing anything so we are mev experts now”. Which means the moment it gets overwhelming or we start getting PA, interest is gonna die out. Kinda bad (less people) kinda good (more alpha LOL). I hope I don’t end up leaving like this.
A major roadblock a lot of people are facing is that they have understood whta mev is and its implications and that fugazi, but.how.tf.do.we.make.bot.and.print.monies??? Old hands saying dive in, new hands wondering what to do what to do. Anyway, just another observation. There are a lot of others in the same boat as me.
The next steps now are gonna be providing a summary of the flashbots, and then doing this 2h intro to solidity course. I did C++ ages ago and know HTML, CSS and lil JS so I feel learning solidity will help.
Next Steps: Flashboys summary, Intro to Solidity Course, Summarising the big MEV resource from post 0. Ok enjoy this meme: