Blockchain platforms have become a fertile ground for innovative strategies and activities, including the utilization of MEV (Miner Extractable Value) bots. These automated programs are designed to take advantage of opportunities within the blockchain ecosystem to maximize profits. While arbitrage strategies are commonly associated with MEV bots, a range of other tactics are employed to extract value from popular blockchain platforms. This article explores the top 9 popular blockchain platforms for MEV Bot activity and highlights the various strategies employed by these bots. Before starting to read this article, we highly recommend you read our article about “What is MEV Bot?”.
Popular Blockchain Platforms for MEV Bot Activity
Ethereum is the most prominent platform for MEV bot activity. Its vast ecosystem, high transaction volume, and extensive range of DeFi applications make it an attractive target for MEV strategies such as arbitrage, front-running, and liquidations. Read our article about “The Complete Beginner’s Guide to Ethereum (ETH)”.
2. Binance Smart Chain (BSC)
Binance Smart Chain has gained significant traction as an alternative to Ethereum due to its lower transaction fees. MEV bot activity on BSC focuses on exploiting arbitrage opportunities, front-running, and other strategies similar to those seen on Ethereum. Read our article about “What is Binance Smart Chain (BSC) & How Does it Work?”.
Solana, known for its high throughput and low fees, has become an attractive platform for MEV bot activity. MEV bots on Solana leverage its fast transaction processing capabilities to execute arbitrage trades and take advantage of price discrepancies. Read our article about “What Is Solana (SOL) And How Does It Work?”.
Avalanche is a blockchain platform designed for high performance and scalability. It has gained attention from MEV bot operators due to its DeFi ecosystem and potential for arbitrage opportunities across different decentralized exchanges. Read our article about “What is Avalanche (AVAX), and How Does it Work?”.
5. Polygon (formerly Matic)
Polygon is a scaling solution for Ethereum, offering faster and cheaper transactions. Its compatibility with Ethereum’s smart contracts has led to the emergence of MEV bot activity, particularly focusing on arbitrage and front-running opportunities.
Terra is a blockchain platform known for its stablecoin ecosystem. MEV bots on Terra may target opportunities within its DeFi protocols, such as stablecoin arbitrage or liquidation events.
Fantom is a fast and secure blockchain platform known for its high throughput and low fees. It has gained attention for MEV bot activity, particularly for arbitrage opportunities and front-running strategies within its DeFi ecosystem.
Harmony is a blockchain platform that focuses on scalability and cross-chain compatibility. MEV bot activity on Harmony may involve strategies such as arbitrage and front-running across its decentralized applications.
9. HECO (Huobi ECO Chain)
HECO is a blockchain platform developed by Huobi Global. It has gained attention as a low-cost alternative to Ethereum, making it attractive for MEV bot activity. MEV bots on HECO may target arbitrage opportunities and front-running strategies within its DeFi applications.
Are MEV Bots Limited to Using Only Arbitrage Strategies on These Platforms?
No, MEV bots do not exclusively use arbitrage strategies on these platforms. While arbitrage is a popular and profitable strategy for MEV bots, they can employ a variety of other tactics to extract value from blockchain platforms.
Do MEV Bots in Trading Reduce the Profits of Other Traders?
Yes. When people use MEV (Miner Extractable Value) bots in trading, it can potentially reduce the profits of other traders. MEV bots are computer programs that are designed to find and exploit opportunities in the market very quickly and effectively. However, in doing so, they can sometimes benefit themselves at the expense of other traders.
For example, one strategy that MEV bots use is called front-running. This means the bots try to do transactions before other users can, which could cause those users to miss out on good prices or opportunities to make money.
Another strategy is arbitrage. MEV bots look for differences in prices between different platforms or places where people buy and sell cryptocurrencies. They take advantage of these differences to make money. However, this can reduce the profit potential for other traders who would have otherwise made money from those price differences.
It’s important to understand that the impact on other traders’ profits can vary depending on how the MEV bots are programmed and what the overall market is like. But the main goal of MEV bots is to gain an advantage over other traders, and that can potentially affect their ability to make profits.
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While Ethereum is the main platform for MEV bot activity, other platforms like Binance Smart Chain, Solana, Avalanche, and Polygon have also caught the attention of these bots. MEV bots use different strategies, like finding price differences, getting ahead of other people’s trades, and taking advantage of situations where people might lose their borrowed money. They do this by using the unique features and opportunities available on each platform. As the blockchain world keeps changing, MEV bot operators will adjust their tactics to make the most of new platforms and opportunities, which will shape how automated value extraction works in the blockchain space.