Скачать или смотреть Nov. 13, 2022: Battlebots 🤖🤼‍♂️ MEV bots cannibalize each other amidst $CVX volatility

crv.mktcap.eth (https://curve.substack.com/) recaps trends in DeFi with a focus on Curve (https://curve.fi/)

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Something pretty interesting in this chart (don’t worry, no technical analysis).

We may never know the full story behind this strange pump. It may have wiped out some leveraged shorts, perhaps this was the intention. It all played out on Binance when the price wicked from $3.80 to $15 in an instant.

It’s a nice(?) feature of our comically low computer token prices: coins like $CVX with ridiculously low circulating supply can be pumped quickly for relatively cheap. Expect the same to happen for several of your favorite altcoins as we settle into a prolonged bear market.

On-chain, the aftermath of this candle got quickly arbed. In this case, the battle turned into a no-holds-barred free-for-all.

The incident would turn out to be an unprecedented comedy. Zoom into this particular example…

Wat mean? Let’s break it down.

Alu pointed to this tx, the second in block, which is some fairly ordinary tomfoolery by an MEV bot on an ETH to CVX trade.

What’s particularly notable about this block is that it was the meat of a different MEV bot running a sandwich on the first MEV bot.

The first tx in the entire block is a bot trading 1668.6 ETH for CVX…

At the other end of the sandwich, the MEV bot gets 1696 $ETH back, a 23.5 $ETH profit. Not bad for a few seconds of work.

In other words, the MEV bots rolled their own slippage. It was not previously clear that MEV bots were snooping on each other, but apparently there’s some hot bot-on-bot battles going on.

In fact, the entirety of block 15963047 was basically an MEV war zone…

In fact, there were several such examples of bot-on-bot crime as MEV bots scrambled to capitalize on the action. With plebs too poor to get rekt, MEV bots have turned to eating each other in these impoverished times.

Curve, for one, welcomes the new era of bot competition.

Too late for this to be financial advice, but prior veCRV lockers are eagerly anticipating the effect of heavy market activity on fee distribution this week following a blockbuster week.

This all points to the difficulties of triggering liquidations. Relying on instantaneous price feeds ensures scam wicks as predators feast on low liquidity markets. It’s far safer to use an exponential moving average so as to smooth things out, like is natively done for Curve v2 pools do.

Curve official Twitter ran some analysis of the entire Convex event, showing the difference in prices between centralized exchanges and Curve’s internal price oracles that served as the frontlines of the MEV battlefield.

Zooming into the graph, note the smoother effects of keeping the indicator lagging.

It’s almost as if Curve has put a lot of thought into optimizing on-chain liquidation mechanics. Is this bullish for the $crvUSD lending stablecoin? Time will tell…

Disclaimers!