(Web3 02) How Frontrunner bots make tons of money

A non-negligible part of the Ethereum and similar blockchain transactions, are the ones related to MEV: miner/maximal extractable value. A well known example are frontrunner bots. In this video I show one example of a bot making 1000 $ in less than a second by sandwiching a big buy order. Frontrunning is not a new concept in financial markets. In existed long ago, but is considered illegal in regulated markets now. Let say you are a broker and a client asks you to buy 1 billion dollars’ worth of a companies shares. You are sure the price will increase when the order is filled. In an imaginary unregulated market, you will go on and buy 50 million dollars’ worth of shares, then put you client’s order. Once the price has risen after the 1 billion dollars’ order is filled, you will sell the shares that you have bought and make good profit in a very short time! The thing is, this is still possible in blockchains…

In this video we will see how we can connect to an #ethereum #node via #web3 #websocket connection; what is the interest in this type of connection; and how do we subscribe to certain types of event on the #blockchain. Afterwards, we will see how we can get more details regarding transactions, and process them, in order to find the ones that are interesting or profitable for us. #frontrunner MEV bots, gas price and #uniswap transactions are the other subjects that we will see.

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