FRB Agent – AI Multi‑Chain MEV & Front‑Running Trading

FRBis an AI‑powered, high‑speed trading agent that scans Ethereum, BNB Chain and Polygon mempools in real‑time, capturing maximum extractable value (MEV) opportunities and executing profitable trades in milliseconds.

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MEV 101: Complete Beginner's Guide to Maximum Extractable Value

Learn everything you need to know about MEV (Maximum Extractable Value), how it works, and how traders extract value from blockchain transactions.

What is MEV?

MEV (Maximum Extractable Value) refers to the maximum value that can be extracted from block production in excess of the standard block reward and gas fees. This is achieved by including, excluding, and changing the order of transactions in a block.

MEV opportunities arise from inefficiencies in transaction ordering and can include arbitrage opportunities, liquidation opportunities, front-running, and sandwich attacks. The total MEV extracted across all blockchains has reached billions of dollars annually.

How Does MEV Extraction Work?

MEV extraction typically involves several steps:

  1. Mempool Monitoring: Bots scan the public mempool (pending transactions) for profitable opportunities
  2. Opportunity Identification: Algorithms identify arbitrage, liquidation, or front-running opportunities
  3. Transaction Construction: Bots construct optimal transactions to capture the identified value
  4. Execution: Transactions are submitted with appropriate gas fees to ensure inclusion in the next block
  5. Profit Capture: The difference between input and output value represents the extracted MEV

Common MEV Strategies

1. Arbitrage

Exploiting price differences of the same asset across different decentralized exchanges (DEXs) or liquidity pools. When a large trade creates a price imbalance, arbitrage bots can buy low on one exchange and sell high on another.

2. Liquidation

Identifying undercollateralized positions in lending protocols and executing liquidations to earn liquidation bonuses. This requires fast execution and accurate price feeds.

3. Front-Running

Seeing a profitable transaction in the mempool and submitting a similar transaction with higher gas fees to execute first. This allows the front-runner to capture the profit opportunity before the original transaction.

4. Sandwich Attacks

Placing two transactions around a target transaction: one before (front-run) and one after (back-run). The first transaction moves the price in a favorable direction, and the second captures the profit.

5. Back-Running

Executing a transaction immediately after a large trade to capture price movement benefits. This is generally considered less harmful than front-running as it doesn't interfere with the original transaction.

Flashbots and Private Bundles

Flashbots is a research and development organization that works on mitigating the negative externalities of MEV extraction. They provide infrastructure for private transaction bundles that bypass the public mempool.

Private bundles offer several advantages:

  • Reduced front-running risk
  • Lower gas costs through direct miner/validator communication
  • Ability to execute complex multi-transaction strategies
  • Better privacy for trading strategies

Learn more about Flashbots in our Flashbots Tutorial.

Getting Started with MEV Trading

If you're interested in MEV trading, here's a step-by-step guide:

  1. Learn the Basics: Understand blockchain mechanics, transaction ordering, and gas fees
  2. Set Up Infrastructure: Deploy low-latency nodes and WebSocket connections
  3. Choose Your Strategy: Start with simpler strategies like arbitrage before moving to complex ones
  4. Use Simulation Mode: Test your strategies in simulation before deploying real capital
  5. Implement Risk Controls: Set slippage limits, gas caps, and budget constraints
  6. Monitor and Optimize: Continuously monitor performance and refine your strategies

Check out our MEV Strategies Guide for detailed strategies and best practices.

Risks and Considerations

MEV trading involves significant risks:

  • Gas Costs: Failed transactions still consume gas, which can exceed profits
  • Competition: Other bots may front-run your transactions
  • Smart Contract Risks: Vulnerabilities in protocols can lead to losses
  • Market Volatility: Rapid price changes can turn profitable opportunities into losses
  • Regulatory Uncertainty: Regulations may change and affect MEV trading legality
  • Technical Failures: Infrastructure issues can cause missed opportunities or losses

Always start with small amounts, use proper risk management, and never invest more than you can afford to lose.

MEV Across Different Networks

MEV opportunities exist across multiple blockchain networks:

  • Ethereum - Largest MEV market with deep liquidity
  • BNB Chain - Lower fees, good for high-frequency strategies
  • Polygon - Fast and cheap transactions
  • Base - Layer 2 with growing MEV opportunities
  • Arbitrum - Low fees with Ethereum compatibility
  • Optimism - Another Layer 2 with MEV potential

Frequently Asked Questions

What is MEV?
MEV (Maximum Extractable Value) refers to the maximum value that can be extracted from block production in excess of the standard block reward and gas fees by including, excluding, and changing the order of transactions in a block.
How does MEV extraction work?
MEV extraction involves identifying profitable opportunities in the mempool (pending transactions), such as arbitrage, liquidations, or front-running opportunities, and executing transactions to capture that value before others.
What is front-running in MEV?
Front-running occurs when a trader sees a pending transaction in the mempool and submits their own transaction with higher gas fees to execute first, capturing the profit opportunity.
What are Flashbots bundles?
Flashbots bundles are private transaction bundles submitted directly to miners/validators, bypassing the public mempool. This reduces front-running risk and allows for more complex MEV strategies.
Is MEV trading legal?
MEV trading itself is legal as it operates within the rules of blockchain networks. However, traders should ensure compliance with local regulations and understand the risks involved.
What are the risks of MEV trading?
Risks include gas costs exceeding profits, front-running by other bots, smart contract vulnerabilities, regulatory changes, and market volatility. Proper risk management and testing are essential.
How do I get started with MEV trading?
Start by understanding blockchain basics, learning about mempool scanning, setting up low-latency infrastructure, and using simulation mode to test strategies before deploying real capital.
What networks support MEV trading?
Major networks include Ethereum, BNB Chain, Polygon, Base, Arbitrum, and Optimism. Each network has different characteristics, fees, and MEV opportunities.

Next Steps

Ready to dive deeper? Explore these resources: