MEV Bots and Passive Income
A Maximum Extractable Value (MEV) bot is a software program designed to identify and exploit profitable opportunities on blockchain networks, particularly Ethereum. These bots monitor pending transactions in the mempool—the pool of unconfirmed transactions—to execute strategies that maximize profits by manipulating transaction ordering within blocks. Audita Common Strategies Employed by MEV Bots: Front-Running: Detecting a pending large transaction and placing a similar transaction with a higher gas fee to be processed first, thereby benefiting from the subsequent price movement. Webopedia Back-Running: Positioning a transaction immediately after a significant trade to capitalize on resulting price changes. Sandwich Attacks: Combining front-running and back-running by placing one transaction before and one after a target transaction, profiting from the price movement caused by the target. Milk Road Arbitrage: Identifying price discrepancies for the same asset across different ...