About - Wed, Jan 15, 2020
Monopolizing transaction flow for arbitrage batching with miner support
This is a strategy that realizes profit by smart transaction batching for the purposes of arbitrage by controlling transaction ordering.
Right now every user sends a transaction directly to the network mempool and thus give away the arbitrage, front-running, back-running opportunities to miners(or random bots).
YCabal creates a virtualized mempool (i.e. a MEV-relay network) that aggregates transactions (batching), such transactions include:
DEX trades Interactions with protocols Auctions etc
TL;DR - Users can opt in and send transactions to YCabal and in return for
not having to pay for gas for their transaction we batch process it and take the arbitrage profit from it. Risk by inventory price risk is carried by a Vault, where Vault depositers are returned the profit the YCabal realizes
Efficiency by Aggregation
By leveraging batching, miner transaction flow, and providing additional performant utilities (e.g. faster calculations for finalizing), we can realize the following potential avenues for realizing profitable activites:
- Meta Transaction Funtionality
- Order trades in different directions sequentially to produce positive slippage
- Backrun Trades
- Frontrun Trades
- At least 21k in the base cost on every transaction is saved
If we have access to transactions before the network we can generate value because we can calculate future state, off-chain
Think of this as creating a Netting Settlement System (whereas blockchains are a real time gross settlement system)
The whole point of Backbone Cabal is to maximize profits from user actions which
gets distributed for free to miners and bots.
We intent to extract this value and provide these profits as
For example: A SushiSwap trader who loses
X% to slippage during his trade
can now get
X-Y % slippage on his trade, because we were able to backrun his
trade and give him the arbitrage profits.
Backbone Cabal gets better and better as more transactions flow because there is less uncertaintity about the future state of the network.