The new trend of MEV on the Solana chain: atomic arbitrage occupies half of the country

Recently, the profits from sandwich attacks on the Solana chain have significantly declined. As of May 6, this figure has dropped to 582 SOL, far below the average daily profit of 10,000 SOL per attack bot a few months ago. However, this is not the end of MEV; a new type of atomic arbitrage is becoming the primary source of trading on the Solana chain.

The data shows that the proportion of atomic arbitrage on the chain has reached an alarming level. On April 8, the tip ratio contributed by atomic arbitrage was as high as 74.12%, and it is basically maintained at more than 50% in normal times. In other words, one out of every two transactions on the current Solana chain is likely to be an atomic arbitrage.

Nevertheless, discussions about atomic arbitrage on social media are few and far between. Is this emerging arbitrage opportunity a hidden treasure or another form of trap?

Atomic Arbitrage: A New Idea for MEV Trading

Atomic arbitrage refers to executing multi-step arbitrage operations within a single, atomic blockchain transaction. A typical operation includes buying an asset at a low price on one DEX and then selling it at a high price on another DEX within the same transaction. Since the entire process is encapsulated in a single atomic transaction, it naturally eliminates counterparty risk and partial execution risk found in traditional cross-exchange arbitrage or non-atomic arbitrage.

Atomicity is not designed specifically for arbitrage, but is an inherent property of the blockchain that ensures state consistency. Arbitrageurs cleverly leverage this feature to bundle operations that would normally need to be executed in steps and carry risks into a single atomic unit, thereby eliminating execution risks from a technical standpoint.

Compared with traditional sandwich attacks or automated trading bots, atomic arbitrage focuses more on finding price differences and capturing arbitrage opportunities across multiple trading pools.

The Contrast Between Earnings and Reality

Data shows that in the past month, the atomic arbitrage on the Solana chain has made a profit of 120,000 SOL (about $17 million). The cost of the address with the highest yield is only 128.53 SOL, but the profit is 14,129 SOL, which is 109 times the yield. The maximum single profit only costs 1.76 SOL and earns 1354 SOL with a single return of up to 769 times.

Currently, there are 5656 atomic arbitrage bots recorded, with an average profit of 24.48 SOL (3071 dollars) per address and an average cost of about 870 dollars. The monthly return rate can reach 352%, which seems to be a good business opportunity.

However, this data only reflects on-chain transaction costs, and atomic arbitrage requires more investment. Hardware requirements include private RPC and an 8-core 8G server, with monthly costs around 150 to 500 dollars. To increase arbitrage speed, it is usually necessary to configure servers with multiple IP addresses.

In fact, an atomic arbitrage deployment website shows that only 15 addresses have earned more than 1SOL in the past week, with the highest being 15 SOL, and most of the others are below 1 SOL or losing money. Considering the cost of servers and nodes, the platform's bots may generally lose money, and quite a few addresses have stopped arbitrage.

Profiteer Analysis: Unveiling the Myth of "Risk-Free Arbitrage"

Although individual cases may seem to be at a loss, overall data shows that atomic arbitrage bots on Solana are still in a profitable state. This aligns with the "Pareto Principle", where a few high-level arbitrage bots generate significant profits while others become new "traps".

The key to atomic arbitrage is to identify arbitrage opportunities. In the case of the highest returns, arbitrageurs seized the loophole of the sparse liquidity of a trading pool, and the large investors who did not pay attention to the depth of the pool provided the buy order. But this kind of opportunity is scarce, and many robots are competing for it, which is more like "winning the lottery".

The recent rise of atomic arbitrage may stem from the fact that some developers package it as a "sure-the-money" business, offering a free version for novice users to use, and charging a 10% revenue share. They also charge a subscription fee by helping to set up nodes and servers and provide more IP services.

In fact, most users have a limited understanding of technology and use similar arbitrage monitoring tools, resulting in minimal profits that are hard to cover the basic costs. Unless they have unique arbitrage opportunity monitoring tools and high-performance servers, participants are likely to go from being cut by trading to being exploited by purchasing servers and subscription fees.

As the number of participants increases, the probability of Arbitrage failure is also rising. A certain program with the highest yield currently has a trading failure rate of over 99%, with almost all trades failing, and participants still need to pay on-chain fees.

! Solana staged a new MEV game, atomic arbitrage accounts for half of the transaction, is it a hidden vault or a new type of scythe

Before diving into this seemingly enticing "atomic arbitrage" wave, potential participants should remain clear-headed, fully assess their own resources and capabilities, and be wary of overly packaged "guaranteed profit" promises to avoid becoming a victim in the new "gold rush."

! Solana Stages a New MEV Gameplay, Atomic Arbitrage Accounts for Half of the Transaction, Is It a Hidden Treasury or a New Scythe