Front-end Trading Volume @ethereum (7d):
1. @CoWSwap: $450m
2. @1inch: $383m
3. @Uniswap: $372m
4. @Uniswap v2: $153m
5. @okxweb3 wallet: $93m
6. @BananaGunBot: $89m
7. @CurveFinance: $99m
8. @MaestroBots: $79m
9. @odosprotocol: $77m
10. @MetaMask: $48m
Takeaways:
1. Bots Bots Bots
- Bots are taking a larger and larger share of order flow.
- They use private mempools exclusively.
- This mitigates toxic MEV in the form of sandwich attacks, front-running, and back-running.
- Value is redistributed to users and block builders.
- The trade-off here is that bots are not decentralized; users must give up their private keys.
2. Batch Bundlers
- Front ends like @CoWSwap use an auction system to fight toxic MEV.
- Trade orders are batched and added to bundles instead of inserting into the public mempool.
- Market makers compete for bundles, and the highest bidder wins.
- This mechanism is rebranded payment-for-order flow, similar to what Robinhood does with Virtu and Citadel.
- Users can retain self-custody and don't have to give up their private keys.
Conclusion
- There is no 100% fool proof system in trading.
- When wealth is moved from one person to another, someone in the middle takes a chunk of it.
- In fact, 7% of users got sandwiched on average in 2023.
In the old days we had sandwich attacks and toxic MEV.
Today we have sophisticated market markers, auction bundles, and benign MEV.
h/t to @hildobby_ and flashbots for the @DuneAnalytics dashboards.