Searcher
Last updated
Last updated
As competition becomes increasingly fierce, Searchers can no longer win solely with Alpha strategies; they must also possess Beta competitiveness to further improve their chances of success.
What is Beta competitiveness? If we liken the competition among Searchers to a war, Alpha strategies are the strategies and tactics, while Beta competitiveness represents the infrastructure such as equipment and supplies, which are prerequisite for competition.
Beta competitiveness consists of speed, inclusion certainty, and cost, which helps to increase Searcher’s chances of winning from different aspects.
The time interval of block production is fixed. For example, BSC produces a block every 3000ms. Therefore, to produce block in time, each step on the assembly line must have a deadline. To send the bundle to the Builder in time, the Searcher needs to minimize the time spent processing the bundle. The main steps for the Searcher to process a bundle are as follows:
Subscribe to target transactions and synchronize the latest block.
Based on the world state of the latest block, calculate the arbitrage opportunities for each transaction according to the Alpha strategy.
Filter the arbitrage opportunities and assemble the selected target transactions and strategy transactions into a bundle in a specified order.
Send the bundle to the Builder.
From the steps mentioned above, assuming there is no network fluctuation, the lantency of transaction subscription is 100ms, the arbitrage calculation time is 400ms, and the lantency of bundle sending to builder is 100ms, then the total time for bundle processing is 600ms. Transactions sent after 2200ms will exceed the Builder's deadline and cannot become arbitrage opportunities for the Searcher. The shorter the time the Searcher takes to process the bundle, the larger the range of arbitrage opportunities.
Furthermore, synchronizing the latest world state is a prerequisite for calculating arbitrage opportunities (calculating based on old state would distort the arbitrage action and lose the competitiveness of the Alpha strategy). If the state synchronization lantency is high, it will severely compress the time available for arbitrage calculation, especially during periods of network congestion, which can put immense pressure on computational performance.
In the last step of the bundle processing, the Searcher will submit the bundle consisting of the target transaction and the arbitrage transaction to the Builder. Since there is a block auction between the Builders, only the block that wins the auction will be actually executed. The Searcher needs to send the bundle to all the mainstream builders on the chain, ensuring that the bundle is included in all blocks participating in the auction, to increase the speed of the bundle included on chain.
Cost directly affects the profit of a Searcher. Searchers that are evenly matched in terms of Alpha strategy, speed, and inclusion certainty may not differ much in capturing arbitrage opportunities and calculating arbitrage space. However, if the average cost per arbitrage opportunity varies significantly, over the long term, Searchers with higher costs will gradually become less competitive due to lower profits.
The costs for a Searcher mainly include the execution cost of the Alpha strategy, the cost of improving speed, the cost of enhancing inclusion certainty, and transaction fees. Increasing costs can improve Beta competitiveness, but it also impacts profits. Therefore, it is essential to prioritize and make appropriate trade-offs.
Execution Cost of The Alpha Strategy
The execution of Alpha strategies incurs computational costs. Since the Alpha strategy is the core competitive advantage of a Searcher, and its execution speed also directly affects the processing time of bundles, this cost cannot be reduced.
Cost of Speed Improvement
Improving speed invloves cost of development and server. To reduce transaction subscription latency, bundle sending latency, and the latency in synchronizing the latest world state, it is necessary to develop algorithms and build a high-speed backbone network. This is too costly for a Searcher, so utilizing established third-party services is a cost-effective choice.
Cost of Enhancing Inclusion Certainty
Enhancing inclusion certainty primarily involves the cost of removing Builder rate limits. Some Builders' APIs impose rate limits on bundle requests, which require payment to lift. Searchers can attempt to freely integrate with RPCs that allow sending bundles, which will forward the bundles to mainstream Builders. This approach not only saves costs but also ensures speed and inclusion certainty of transactions.
Transaction Fee
When calculating the arbitrage opportunity space, only when the arbitrage space minus the transaction fee is greater than 0 is it considered an arbitrage opportunity. If transaction fees can be reduced to 0, then even the arbitrage opportunities generated by smallest market fluctuations can be captured.
Trading at 0 gwei not only saves transaction costs but also greatly expands the range of arbitrage opportunities that the Alpha strategy can capture. Currently, Builders on BSC support receiving transactions at 0 gwei. For Searchers whose Alpha strategy focuses on expanding the range of arbitrage opportunities, they should try to send transactions at 0 gwei as much as possible to eliminate this cost.
BlockRazor provides Searchers with high-performance network services, enabling them to subscribe to transactions and synchronize blocks with extremely low latency.
Benchmark shows that compared to the industry-leading high-performance network provider bloXroute, BlockRazor can receive the latest transactions with lower latency. Detailed data comparisons are as follows:
The chart data shows that transactions submitted to Scutum have a probability of being included in the next block as high as 95%, and 100% probability being included in the next 2 blocks, which significantly surpasses that of competitors.
BlockRazor's subscription plans are highly competitive in terms of pricing, and Searchers are allowed to send 0 gwei transactions to the Builder with the highest block production rate on BSC. Additionally, Searchers can subscribe to the private transaction stream provided by Scutum, and by executing backrun strategies, they can further expand the range of arbitrage opportunities. The profits generated from this can be used to subsidize the costs associated with the subscription plan.
How to understand that the average gas price of a bundle must not be less than 1 gwei?
Suppose a bundle contains three transactions {tx1, tx2, tx3}, where tx1 comes from the mempool. The BlockRazor Builder will exclude tx1 and only calculate the average gas price of tx2 and tx3. The calculation formula is: (tx2.gas price × tx2.gas used+tx3.gas price × tx3.gas used) / (tx2.gas used+tx3.gas used)
Additionally, BlockRazor also demonstrates excellent performance in terms of latency of synchronization of the latest world state, better meeting the needs of speed-sensitive users. For the complete comparison results, please refer to the of the high-performance network.
Searchers can directly integrate with Scutum's method, construct a bundle consisting of mempool transactions and strategy transactions and submit it to Scutum. Scutum RPC will forward it to mainstream Builders at the earliest opportunity. Additionally, based on a globally distributed network, Scutum achieves end-to-end low-latency forwarding at the network level.
for BlockRazor
to BlockRazor, subscribe to the Tier2 or Tier1 plan, and go to the account module to obtain the auth token
to the private orderflow of Scutum
Execute the arbitrage strategy, and submit bundle to Scutum RPC using
for BlockRazor
to BlockRazor, subscribe to the Tier2 or Tier1 plan, and go to the account module to obtain the auth token
Integrate the method of the high-performance network to subscribe to the latest transactions with low latency; synchronize blocks with low latency through
Execute the arbitrage strategy, and submit bundle to Scutum RPC using .
for BlockRazor
to BlockRazor, subscribe to the Tier2 or Tier1 plan, and go to the account module to obtain the auth token
Join to contact, integrate with the BlockRazor Builder's API of 0 Gwei Transaction at End of Block
