Shushuo Ethereum MEV: The maximum profit in a single day exceeds 1 million US dollars, and sandwich trading is still the main means of profit
There has always been a "dark forest" in the Ethereum ecosystem. In the virtual space of the transaction block, the Gas mechanism enables participants related to block verification to obtain profits through any activities including, excluding or reordering transactions in the block. These profits are MEV (Maximum Extractable Value, the maximum possible extract value). Within a year after the rise of DeFi, the size of the MEV market increased by 1113.21%. At that time, the average price of Gas continued to be higher than 110 Gwei, which was considered to be one of the negative effects of the development of MEV.
Today, the average gas price of Ethereum has continued to rise after being below 50 Gwei for a long time. It has been higher than 100 Gwei for several consecutive days, and it is at a high level in the past year. However, the number of on-chain transactions directly related to gas prices has remained relatively stable. So, will MEV be the reason for this increase in Gas prices?
PANews data news column PAData comprehensively analyzed the transaction data on the chain, the verification node data of the submitted block and the MEV transaction data and found that:
Since May 5, the average daily Gas price of Ethereum has exceeded 100 Gwei for 6 consecutive days. The average price of Gas has risen by 40.20% this month, and it has risen by 499.54% this year, which is a very significant increase.
The total daily transaction fees actually paid to nodes also continued to grow. This month, the total daily transaction fees increased by 29.60%, and this year has increased by 456.57%.
The number of active Ethereum nodes has reached approximately 565,100, an increase of 3,441 this month, which may lead to a decline in staking revenue, thereby driving more nodes to adopt MEV. In less than one month (April 16th to May 11th), the number of Flashbots MEV-Boost relay nodes has increased by 66,000 nodes, and the total number of new nodes this year has reached 14.46 ten thousand.
The number of blockchains proposed by non-MEV nodes has dropped to 757, a drop of 20.15% from the beginning of this month, and a sharp drop of 51.88% from a month ago, which means that more and more blocks are proposed by nodes using MEV propose. Flashbots, Ultra Sound, Agnostic, and Multiple Relays are currently the four most important MEV-Boost Relayers. At present, the blocks proposed by these 4 together account for 76.42% of the total amount of the day.
Judging from the growth trend, the adoption rates proposed by Ultra Sound, Agnostic, Multiple Relays, Blocknative, and Aestus have all increased recently. Among them, the number of blocks proposed by Ultra Sound in the last month has increased by 80.83%, which is a significant increase.
In the last month, the total profit of MEV obtained by traders through the three methods of arbitrage, sandwich trading and liquidation is about 13.0142 million US dollars, and the cumulative number of occurrences is about 347,100. And in the last month, the number of transactions has increased by 106.01%, and the total profit has increased by 1943.50%.
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01 The average daily price of Gas has exceeded 100 for several days, and the total daily handling fee has increased by 30% this month
Recently, the Gas price of Ethereum has risen rapidly. Since May 5, the average daily Gas price of Ethereum has exceeded 100 Gwei for 6 consecutive days, reaching a peak of 155.8 Gwei at one point, which is at an extremely high level in the past year. The rise started on April 17. Before that, the average price of Gas mainly fluctuated between 20-40 Gwei, but then it quickly broke through 40 Gwei, and after May, it quickly broke through 80 Gwei. In terms of growth rate, as of May 10, the average gas price has risen by 40.20% this month, and has risen by 499.54% this year, which is a very significant increase.
Driven by the increase in the average price of Gas, the transaction fees of Ethereum also continued to rise. On the one hand, the number of daily burns keeps growing. The total amount burned on May 10 was about 9898 ETH, and the total amount burned in a single day increased by 40.75% from the beginning of this month and 555.45% from the beginning of this year. During this period, the highest single-day total burning amount once reached 14597 ETH, which is an extremely high level in the past year.
On the other hand, the total daily transaction fees actually paid to nodes also continued to grow. The total transaction fee on May 10 was about 1677 ETH, and the total daily transaction fee increased by 29.60% from the beginning of this month and 456.57% from the beginning of this year. Among them, the total daily transaction fees on May 5 and 6 both exceeded 2,000 ETH, which was close to the highest level in a year.
Generally speaking, the change of Gas price is positively correlated with the transaction demand on the chain, that is, when the transaction demand increases and the number of transactions increases, the Gas price will also rise simultaneously. However, judging from the recent changes in the number of transactions on the Ethereum chain, the reason for the increase in Gas prices this time does not come from this. According to statistics, the number of transactions on the Ethereum chain on May 10 was about 1.0361 million, a decrease of 0.95% from the beginning of the month. Judging from the changing trend of this year, it is basically stable at around 1.01 million times, with little change. However, due to the recent popularity of MEME tokens, users may pay a higher gas fee for pre-emptive transactions. Last week, PANews reported that an address paid 64 ETH for a transaction worth 84 ETH, and completing the transaction first allowed the user to obtain higher returns later.
02 The number of blocks submitted by MEV-Boost Relay continues to grow
If the reason for pushing up the gas price does not come from the transaction demand side, is it possible to come from the transaction verification side? Since Ethereum opened withdrawals, attracted by the high interest rates of LSD and LSDFi, more funds entered the pledge activities, and the number of active nodes increased steadily. It reached about 565,100 on May 10, an increase of 3441 this month indivual. However, according to the built-in monetary system of Ethereum, when the number of pledge nodes increases, the pledge income will decrease. This means that the active staking activity after the withdrawal makes the staking income of the node decrease instead. Nodes are motivated to adopt MEV in order to increase yield, which may drive up Gas prices.
According to statistics, the number of newly registered Fashbots MEV-Boost relay nodes has continued to increase this year. After April 16, the number of newly added nodes per week has exceeded 12,000, which is much higher than the previous level, which means that the recent growth rate has increased significantly. . In less than one month (April 16th to May 11th), the number of Fashbots MEV-Boost relay nodes has increased by 66,000 nodes, and the total number of newly added nodes this year has reached 144,600.
In addition, the distribution of proposed nodes for daily blocks can also reflect the recent trend of rapid growth in the number of nodes using MEV robots. According to statistics, on May 10, the number of blockchains proposed by non-MEV nodes has dropped to 757 blocks, a drop of 20.15% from 948 blocks at the beginning of this month, and a sharp drop of 51.88% from 1573 blocks a month ago. Overall, the downward trend is significant, i.e. more and more blocks are proposed by nodes using MEV.
From the current mainstream MEV-Boost Relayer, Flashbots, Ultra Sound, Agnostic and Multiple Relays are the four most important. As of now (May 10), the number of blocks proposed by Ultra Sound is 1953, the number of blocks proposed by Flashbots is 1468, the number of blocks proposed by Agnostic and Multiple Relay are 1183 and 837 respectively, these 4 The total number of blocks proposed by MEV-Boost Relayer accounted for 76.42% of the total amount of the day.
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03 Recently, MEV has made a single-day profit of up to US$1 million, and sandwich trading is still the main means of profit
When MEV grows rapidly in 2021, only 12% of the profits will be obtained by miners, and the remaining 88% will be obtained by traders [2]. Therefore, in addition to nodes, a wider range of traders may obtain MEV and thus push up the Gas price. Currently, there are three main ways for traders to obtain MEV, namely Arbitrage, Sandwich and Liquidation.
According to statistics, in the last month, the total profit of MEV obtained by traders through these three methods was about 13,014,200 US dollars, and the cumulative number of occurrences was about 347,100 times, and it showed an increasing trend within the month. A total of 14,800 MEV transactions were monitored on May 11, with a total profit of 697,500 US dollars. The number of transactions increased by 106.01% from 7169 a month ago (April 12th), and the total profit increased by 1943.50% from $34,100 a month ago. In addition, in the past month, the total daily profit exceeded 1 million US dollars three times, and the highest total profit on April 19 reached 1,280,500 US dollars.
Judging from the profit ratio of the three acquisition methods, sandwich trading is currently the most important MEV method. In the last month, the total profit made by traders through sandwich trading was about 9.9267 million US dollars, accounting for about 76.28%. Since the beginning of this month, the total daily profit from sandwich transactions has accounted for no less than 61% of the total daily MEV profit.
Sandwich trading is profitable through front-running trades. In the last month, the highest cumulative profit obtained by a single address through sandwich trading was about $7.339 million. The profit levels of the other nine addresses with the highest profit ranged from $70,000 to $370,000. Overall, the profit level of a single address varies greatly.
If you consider the cost, you can see that through sandwich trading transactions, the highest profit that a single address can obtain per $1 cost reaches $21.37, but most addresses can basically obtain less than $2 per $1 cost. The address is less than $0.50. In general, the sandwich trading method requires a certain scale of cost input.
Judging from the popular pool of sandwich transactions, it is mainly concentrated on the popular trading pairs on Uniswap, such as USDC/WETH, USDC/USDT, PEPE/WETH, and a small amount comes from the popular trading pairs on Curve. In the last 1 month, the highest profit from a single sandwich transaction was $138,700, while the transaction cost was only $725. Judging from the situation of a single transaction with high profits, most of them have achieved the result of "small and big". The general profit is more than 30,000 US dollars, while the cost is mostly less than 1,000 US dollars.
Although the market's evaluation of MEV is mostly negative, as it is currently happening, MEV has caused losses to ordinary trading users and pushed up the gas price of transactions. But MEV is actually a double-edged sword. In addition to these negative effects, MEV may also expand the transaction scale and promote the development of DeFi. According to EigenPhi's analysis, in 2022, arbitrage and sandwich robots contributed a total of $328 billion in trading volume for Dex, accounting for about 49% of the annual trading volume. It can be seen that MEV robots have become an integral part of the DeFi ecosystem that cannot be ignored, and it is necessary for ordinary users to have a deeper understanding of MEV in order to make more appropriate trading decisions.
