1/13. Introduction
To all you AMM users out there!
$UNI | $SUSHI | $CAKE
This is an educational thread to help you understand the value of privacy while using an AMM,
and how to protect yourself from #frontrunning & #MEV using @secretnetwork #SCRT #SEFI
To all you AMM users out there!
$UNI | $SUSHI | $CAKE
This is an educational thread to help you understand the value of privacy while using an AMM,
and how to protect yourself from #frontrunning & #MEV using @secretnetwork #SCRT #SEFI
2/13. The problem
When using AMM’s,
Your transactions are public on the blockchain,
They can be searched,
They can be analyzed,
And bots and miners take positions against your trades to profit off of you!
How does this work?
When using AMM’s,
Your transactions are public on the blockchain,
They can be searched,
They can be analyzed,
And bots and miners take positions against your trades to profit off of you!
How does this work?
3/13. Bots and Frontrunning
When you trade, bots scan transactions in the transaction pool.
They see:
- What you trade
- How much you trade
- How much Gwei you paid
In a split second, they front-run your transaction!
What is frontrunning you ask?
When you trade, bots scan transactions in the transaction pool.
They see:
- What you trade
- How much you trade
- How much Gwei you paid
In a split second, they front-run your transaction!
What is frontrunning you ask?
4/13. Frontrunning
1) Bot identifies transaction to leverage,
2) Bot trades against your unprocessed trade,
3) Bot pays slightly more Gwei,
4) Miner processes bot’s transaction first,
5) YOU have less profit, or may even lose money
1) Bot identifies transaction to leverage,
2) Bot trades against your unprocessed trade,
3) Bot pays slightly more Gwei,
4) Miner processes bot’s transaction first,
5) YOU have less profit, or may even lose money
5/13. The cost?
Bots and miners extracted over $360m so far in 2021!!
Source: explore.flashbots.net
What? Miners too? Yes!
Bots and miners extracted over $360m so far in 2021!!
Source: explore.flashbots.net
What? Miners too? Yes!
6/13. Miners and MEV
With MEV, things get even worse
1) Miners scan the transactions they are about to process into a new block.
2) Just like a bot, they scan for trades they are able to leverage.
3) Just like a bot, they put in a transaction before yours
Why is this worse?
With MEV, things get even worse
1) Miners scan the transactions they are about to process into a new block.
2) Just like a bot, they scan for trades they are able to leverage.
3) Just like a bot, they put in a transaction before yours
Why is this worse?
7/13. MEV is the worst 1
A Frontrunning bot competes with you, traders, and other bots in the transaction pool.
A bot has to consider another trader, or another bot, using even more Gwei. Beating them to the opportunity.
A bot front-runs at a risk.
A Frontrunning bot competes with you, traders, and other bots in the transaction pool.
A bot has to consider another trader, or another bot, using even more Gwei. Beating them to the opportunity.
A bot front-runs at a risk.
8/13. MEV is the worst 2
A miner has no competition,
A miner builds the block,
he sits behind the transaction pool,
no risk of another miner going first,
no bot can beat it,
no trader can beat it,
you can’t beat it.
A miner has no competition,
A miner builds the block,
he sits behind the transaction pool,
no risk of another miner going first,
no bot can beat it,
no trader can beat it,
you can’t beat it.
9/13. MEV
Because the miner builds the block,
the miner determines the transaction order,
so the miner pays 1 Gwei,
and puts its own transaction before yours, or before that of a bot.
Example: etherchain.org/block/12187456…
Because the miner builds the block,
the miner determines the transaction order,
so the miner pays 1 Gwei,
and puts its own transaction before yours, or before that of a bot.
Example: etherchain.org/block/12187456…
10/13. All mining pools do it
This gives a miner risk-free opportunities at extremely low cost. Giving the miner many more opportunities to leverage your trades to its own benefit than a bot ever could!
All major mining pools have implemented or announced MEV.
This gives a miner risk-free opportunities at extremely low cost. Giving the miner many more opportunities to leverage your trades to its own benefit than a bot ever could!
All major mining pools have implemented or announced MEV.
11/13. Preserve your privacy
You need to preserve your privacy while trading.
You need a blockchain that allows for encryption.
Not just the communication to-and-from the smart contract. The state while processed by a miner needs to be encrypted
Enter $SCRT and a new AMM $SEFI
You need to preserve your privacy while trading.
You need a blockchain that allows for encryption.
Not just the communication to-and-from the smart contract. The state while processed by a miner needs to be encrypted
Enter $SCRT and a new AMM $SEFI
12/13. Secret Network
Secret Network is the first layer 1 blockchain protocol that keeps the inputs, outputs, and state of transactions and interactions with Secret-Smart contracts encrypted.
Nobody can analyze
Nobody can front-run
Nobody can re-order
You keep the profits!
Secret Network is the first layer 1 blockchain protocol that keeps the inputs, outputs, and state of transactions and interactions with Secret-Smart contracts encrypted.
Nobody can analyze
Nobody can front-run
Nobody can re-order
You keep the profits!
13/13. Learn more
Discover more about Secret Network:
scrt.network
Join:
discord.com/invite/SJK32GY
Follow:
@SecretNetwork
Or watch this 60 seconds video for a quick introduction:
Discover more about Secret Network:
scrt.network
Join:
discord.com/invite/SJK32GY
Follow:
@SecretNetwork
Or watch this 60 seconds video for a quick introduction:
• • •
Missing some Tweet in this thread? You can try to
force a refresh
