Arbitrage resilience refers to a system’s capacity to withstand and maintain stability amidst opportunistic price discrepancies across different markets. It signifies a state where the underlying mechanisms of a protocol or digital asset are robust enough to prevent exploitative arbitrageurs from causing significant disruptions or asset value erosion. This quality is vital for the dependable functioning of decentralized exchanges and other financial applications.
Context
The discourse surrounding arbitrage resilience frequently addresses the design of automated market makers and the implications of slippage on user experience and protocol security. Debates often focus on mechanisms that limit the impact of large trades on price discovery and the potential for smart contract vulnerabilities that malicious actors might exploit through rapid arbitrage. Observing how protocols adapt their liquidity provision and fee structures to enhance this resilience is a key area of interest.
This research introduces a batch-processing AMM mechanism that maintains a constant potential function, provably eliminating miner arbitrage and enforcing strategy-proof trading.
A novel AMM mechanism processes all block transactions in a single batch, mathematically eliminating block producer arbitrage and mitigating MEV extraction.
Researchers devised a new AMM mechanism that uses a constant potential function to eliminate MEV, achieving provable strategy proofness at the application layer.
By shifting MEV mitigation to the AMM's core logic, this mechanism guarantees risk-free profit elimination and truthful user behavior under fair sequencing.
A novel AMM mechanism processes transactions in batches using a constant potential function, guaranteeing arbitrage resilience and user incentive compatibility.
By shifting MEV mitigation from consensus to smart contract design, a new mechanism guarantees strategy proofness and arbitrage resilience for automated market makers.
A new batch-processing AMM mechanism achieves arbitrage resilience and incentive compatibility, fundamentally shifting MEV mitigation to the smart contract layer.
A new AMM mechanism ensures provable incentive compatibility by maintaining a constant potential function, fundamentally eliminating application-layer MEV exploitation.
Research shifts MEV mitigation from consensus to smart contracts, using batch processing and a potential function to ensure arbitrage resilience and fairer DeFi markets.
This research introduces a novel batch-processing mechanism for Automated Market Makers, fundamentally mitigating Miner Extractable Value and fostering equitable transaction execution.
This research establishes a formal theory of Maximal Extractable Value (MEV) through an abstract blockchain model, enabling rigorous security proofs against economic attacks.
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