New Trends of MEV on Solana: Atomic Arbitrage Becomes the Mainstream Trading Model

With the decentralized exchange (DEX) starting to offer personalized priority fee options and anti-trap measures, the profits from sandwich attacks on the Solana network have significantly declined. As of May 6, this figure has dropped to 582 SOL, while a few months ago, the daily average profit for a single sandwich attack bot could reach around 10,000 SOL. However, this is not the end of MEV; a new type of atomic Arbitrage is becoming the main source of trading on the Solana chain.

Data shows that the proportion of atomic arbitrage on-chain has reached an astonishing level. On April 8, the tip contribution from atomic arbitrage reached as high as 74.12%, and during other times, it generally maintained above 50%. In other words, currently on the Solana chain, one out of every two transactions may be for atomic arbitrage.

However, there is almost no discussion about atomic Arbitrage on social media. Is this new type of Arbitrage opportunity a hidden treasure or just another fancy scythe?

Atomic Arbitrage: A New Approach to MEV Trading

Atomic arbitrage refers to executing arbitrage operations that involve multiple steps within a single, atomic blockchain transaction. A typical atomic arbitrage involves buying an asset at a lower price on one DEX and then selling that asset at a higher 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 that exist in traditional cross-exchange arbitrage or non-atomic arbitrage.

Atomicity is not a feature designed for arbitrage, but rather an inherent fundamental property of blockchain to ensure state consistency. Arbitrageurs cleverly exploit this guarantee by bundling operations that would normally need to be executed in steps and carry execution risks (buying, selling) into a single atomic unit, thereby eliminating execution risk at a technical level.

The Myth of Easy Money and the Harsh Reality

According to the current data, this atomic Arbitrage seems to have a good profit margin. Over the past month, atomic Arbitrage on the Solana chain has yielded 120,000 SOL (worth about $17 million), while the address with the highest profit spent only 128.53 SOL, achieving a return of 14,129 SOL, resulting in a return rate of 109 times. Among them, the largest single profit was made by spending only 1.76 SOL, earning 1,354 SOL, with a single profit rate of 769 times.

Currently, there are 5,656 atomic arbitrage bots recorded, with an average yield of 24.48 SOL (3,071 USD) per address and an average cost of about 870 USD. Although this figure is not as high as that of previous sandwich attackers, it still seems to be a good business model, as the monthly return rate can reach 352%.

However, it is important to note that the costs displayed here are only the costs of on-chain transactions. More investment is required behind atomic arbitrage.

According to the information on a webpage created by a certain MEV developer, there are several hardware requirements for executing atomic arbitrage, including a private RPC and a server with 8 cores and 8GB of RAM. From a cost perspective, the server's cost is approximately between 100 to 300 dollars per month, while setting up a private server requires a minimum of around 50 dollars per month. The overall monthly cost is around 150 to 500 dollars, and this is just the minimum threshold. In addition, because faster arbitrage is needed, it is usually necessary to configure servers with multiple IP addresses simultaneously.

From the example, it can be seen on a certain atomic Arbitrage deployment site that in the past week, only 15 addresses have earned more than 1 SOL, with the highest being 15 SOL, while the earnings of others have been below 1 SOL within the week, and many are in a loss state. When considering the costs of servers and nodes, it is likely that all of the platform's bots are in a loss state. It is also evident that many addresses have chosen to stop Arbitrage.

Who is Profiting? Unveiling the "Sure Profit" Arbitrage Mystery

Of course, reality seems to conflict with big data. Overall, the atomic arbitrage bots on Solana are still in a profitable state. This is also constrained by the "80/20 rule," where a small number of high-level arbitrage bots have obtained a large amount of profit, while others have still become new victims.

Looking back at the overall logic of atomic arbitrage, it is not difficult to find that the most important point to achieve profitability is to discover arbitrage opportunities. Taking the most profitable arbitrage as an example, this transaction initially purchased 3,679 grok tokens for 2.13 SOL (with a unit price of about $0.08), and then sold them for $199,000 (with a unit price of about $54.36). It is clear that this arbitrage success also took advantage of a loophole in a trading pool with low liquidity, made by a large buyer who did not pay attention to the pool's depth.

But essentially, such opportunities are rare, and because the bots on the chain are almost all watching for similar opportunities, these occasional large arbitrage opportunities are more like winning the lottery.

The recent rise of atomic arbitrage may be due to some developers packaging this arbitrage opportunity into a guaranteed profitable business, creating a free version for novice users to use at no cost, along with tutorials. However, there is a 10% profit sharing when profits are made from arbitrage. In addition, these teams also charge subscription fees by assisting in building nodes and servers, as well as providing additional IP services.

In fact, due to most users' limited understanding of technology and the similarity of the arbitrage opportunity monitoring tools used, the final profits are not substantial and cannot cover the basic costs.

Unless equipped with a certain technical foundation, unique arbitrage opportunity monitoring tools, and high-performance servers and nodes. Most players who wish to participate in atomic arbitrage have merely transitioned from being scammed in trading coins to being scammed by buying servers and subscription fees. Moreover, as more people participate, the probability of failure in this arbitrage is also increasing. Taking the program with the highest returns on a certain platform as an example, this program currently has a trading failure rate of over 99%, meaning that almost all transactions have failed, while the participating bots still have to pay on-chain fees.

Before diving into the seemingly enticing wave of "atomic arbitrage," every potential participant should maintain a clear mind, thoroughly assess their own resources and abilities, and be wary of those overly packaged promises of "risk-free" returns, to avoid becoming yet another wave of victims in this new "gold rush."