Solana stages a new MEV gameplay, atomic arbitrage accounts for half of the transaction, is it a hidden vault or a new sickle

Author: Frank, PANews

Sandwich attack revenue on Solana has dropped significantly as individual DEXs began to offer personalized priority fee options and anti-pinch measures. As of May 6, this figure has dropped to 582 SOLs, and a few months ago, the average daily income of a single sandwich attack robot could basically reach 10,000 SOLs. But this is not the end of MEV, a new type of atomic arbitrage is becoming the main source of trading on the Solana chain.

According to data from sandwiched.me, the proportion of this atomic arbitrage on the chain has reached an exaggeration. On April 8, the tip ratio contributed by atomic arbitrage reached 74.12%, and at other times, it basically remained above 50%. In other words, there may be one of the two transactions on the Solana chain for atomic arbitrage.

But on social media, discussions on atomic arbitrage are hardly seen. Is this new type of arbitrage opportunity a hidden vault? Another sickle.

Atomic arbitrage, a new idea for MEV trading

First, let’s understand what atomic arbitrage is? Atomic arbitrage refers to the execution of arbitrage operations involving multiple steps in a single, atomic blockchain transaction. A typical atomic arbitrage involves buying an asset at a lower price on a decentralized exchange (DEX) in the same transaction, and selling the asset at a higher price on another DEX. Since the entire process is encapsulated in a single atomic trading, it naturally eliminates the counterparty risks and partial execution risks present in traditional cross-exchange arbitrage or non-atomic arbitrage. If the transaction is successful, the profit will be locked; if the transaction fails, in addition to losing the transaction fee, the asset status of the arbitrageur will return to its original state, and there will be no situation where only the purchase is completed but the sale is not completed.

Atomicity is not a feature designed for arbitrage, but a basic attribute inherent in blockchain to ensure state consistency. Arbitrageists skillfully use this guarantee to bundle operations (buy, sell) that originally needed to be executed step by step and with execution risks in one atomic unit, thereby eliminating execution risks at the technical level.

The past focus of sandwich attacks or automatic trading robots was focused on the same trading pair and found profitable opportunities. Then, by packing transactions, the opponent's transactions are sandwiched in the middle or simply sending transactions to create opportunities. Atomic arbitrage is essentially a method of packaging transactions, but it pays more attention to discovering price differences in multiple trading pools and obtaining arbitrage opportunities.

Profitable Myth and Cruel Reality

Judging from the current data, this atomic arbitrage seems to have good profit margins. In the past month, atomic arbitrage on the Solana chain has made 120,000 SOL (worth about US$17 million), while the most profitable address cost only 128.53 SOL, and the return reached 14,129 SOLs, with a yield of 109 times. The largest single profit was earned by 1,354 SOLs after spending only 1.76 SOLs, with a single yield of 769 times.

Currently, there are 5,656 atomic arbitrage robots in the statistics, with an average return of 24.48 SOL ($3,071) per address, and an average cost of about $870. Although this value seems to be less than the previous sandwich attackers, it seems to be a good business experience, after all, the monthly yield can reach 352%.

However, it is worth noting that the costs shown here are only the costs of on-chain transactions. More investment is needed behind atomic arbitrage.

According to the web page information produced by a MEV developer, there are several requirements for hardware conditions for performing atomic arbitrage, a private RPC, an 8-core 8G server. From a cost perspective, the cost of a server is about $100 to $300 per month, while building a private server requires a minimum of $50 per month. The overall monthly cost is around US$150 to RMB500, and this is only the minimum threshold. In addition, since arbitrage is faster, it is usually necessary to configure servers with multiple IP addresses at the same time.

From an example, it can be seen on a certain atomic arbitrage deployment website that only 15 addresses have earned more than 1SOL in the past week, with the largest being 15 SOL. The other week's earnings are below 1 SOL and many are in a loss state. If the server and node costs are combined, all robots on this platform may be in a loss state. And it can be clearly seen that many addresses have chosen to stop arbitrage.

Who is making a profit? Uncovering the arbitrage fog of "stable profit

but no loss"

Of course, reality seems to conflict with big data. Judging from the overall data, robots that perform atomic arbitrage on Solana are still in a profitable state. This cannot escape the constraints of the "28 Rule", and a few high-level arbitrage robots have obtained a lot of profits. The others are still becoming new leeks.

Looking back at the overall logic of atomic arbitrage, it is not difficult to find that the most important point to achieve profitability is to discover arbitrage opportunities. Take the most profitable arbitrage as an example. The deal initially purchased 3679 grok tokens with 2.13 SOL (the unit price is about $0.08), and then sold for $199,000 (the unit price is about $54.36). It is obvious that this arbitrage success also captured the loophole of the lack of liquidity in a trading pool, and a large player who did not pay attention to the depth of the pool was paid.

But essentially, this kind of opportunity is rare, and because almost all the robots on the chain are staring at similar opportunities. Therefore, this occasional big arbitrage opportunity is more like winning a lottery.

The recent rise of atomic arbitrage may be because some developers packaged this arbitrage opportunity into a business that is stable and profitable, and developed a free version for novice users to use for free, and provide tutorials. It is just a 10% profit share when you make arbitrage. In addition, these teams also charge subscription fees by assisting in building nodes and servers, as well as providing services with more IP.

In fact, because most users do not have a deep understanding of technology, the arbitrage opportunity monitoring tools used are similar. In the end, there is not much profit and the underlying expenses cannot be covered.

According to PANews' observation, unless it has a certain technical foundation, has unique arbitrage opportunity monitoring tools and is equipped with high-performance servers and nodes. Most players who want to participate in atomic arbitrage are simply changing from being cut into currency speculation to buying servers and subscription fees being cheated. And as more and more people participate, the probability of failure of this arbitrage is also increasing. Taking the program with the highest profit on sandwiched.me as an example, the current transaction failure rate of this program reaches more than 99%, which means that basically all transactions have failed, and the participating robots still have to pay the on-chain fee.

Before joining this seemingly attractive wave of "atomic arbitrage", every potential participant should keep a clear head, fully evaluate his own resources and abilities, beware of those over-packaged promises of "stable profits and no loss", and avoid becoming another wave of leeks under this new "gold rush".