Arbitrage bots are automated programs designed to exploit price discrepancies across different cryptocurrency exchanges or trading pairs. These bots execute rapid trades to profit from minute differences in asset valuations, thereby contributing to market efficiency. Their operation relies on sophisticated algorithms and low-latency network connections to capitalize on fleeting opportunities. The presence of arbitrage bots generally helps to align asset prices across disparate trading venues.
Context
The discourse around arbitrage bots often surfaces in analyses of market liquidity and price discovery mechanisms within the digital asset space. Their impact on price convergence and potential for market manipulation are subjects of ongoing debate among traders and regulators. Understanding their role is key to interpreting price movements and the operational dynamics of crypto markets.
This research reveals how transaction reverts on rollups are not errors but strategic MEV outcomes, driven by trade-splitting and duplication, demanding protocol reforms.
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