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.