New Landscape of MEV on Solana: Rise of Atomic Arbitrage

With DEX platforms increasingly introducing personalized priority fee options and anti-arbitrage measures, the profits from sandwich attacks in the Solana ecosystem have significantly declined. As of May 6, this figure has dropped to 582 SOL, far below the average daily profit of 10,000 SOL per attack bot just a few months ago. However, this does not signify the end of MEV; a new type of atomic Arbitrage is rapidly becoming a major source of transactions on the Solana blockchain.

Data shows that the share of atomic arbitrage in on-chain transactions has reached an astonishing level. On April 8th, the tip ratio contributed by atomic arbitrage reached as high as 74.12%, while at other times it generally maintained above 50%. This means that currently, one out of every two transactions on the Solana chain may be an atomic arbitrage.

Nevertheless, there is little discussion about atomic arbitrage on social media. Is this emerging arbitrage opportunity a hidden treasure or another form of trap?

Atomic Arbitrage: A New Approach to MEV Trading

Atomic arbitrage refers to executing multi-step arbitrage operations in a single, atomic blockchain transaction. A typical operation includes buying an asset at a low price on one DEX in the same transaction and subsequently selling it at a high price on another DEX. Since the entire process is encapsulated in a single atomic transaction, it naturally eliminates counterparty risk and partial execution risk found in traditional cross-exchange arbitrage or non-atomic arbitrage. If the trade is successful, profits are locked in; if it fails, only the transaction fee is lost, and the asset's status is restored.

Atomicity is not designed for arbitrage, but is an inherent property of blockchain that ensures state consistency. Arbitrageurs cleverly utilize this feature to bundle operations that would originally be executed in steps and carry risks into a single atomic unit, eliminating execution risks from a technical standpoint.

Compared to traditional sandwich attacks or automated trading bots that focus on a single trading pair, atomic arbitrage places greater emphasis on discovering price differences across multiple trading pools to seize arbitrage opportunities.

The Myth of Windfall Profits and Harsh Reality

Recent data shows that atomic arbitrage appears to have considerable profit potential. In the past month, atomic arbitrage on the Solana blockchain has yielded 120,000 SOL, approximately 17 million USD. The address with the highest profit had a cost of only 128.53 SOL, with earnings reaching 14,129 SOL, yielding a return of 109 times. The largest single profit cost only 1.76 SOL, earning 1,354 SOL, with a single profit rate as high as 769 times.

Currently, there are 5,656 atomic arbitrage bots recorded, with an average profit of 24.48 SOL ( 3071 USD ) per address, and an average cost of about 870 USD. The monthly return can reach 352%, which, although not as high as the previous sandwich attacks, is still a good business.

However, the costs displayed here are only the on-chain transaction costs, and atomic arbitrage requires more investment. The hardware requirements for executing atomic arbitrage include a private RPC, an 8-core 8G server, etc. The monthly cost of the server is approximately $100-300, and the minimum monthly fee for a private node is around $50. The overall monthly cost is between $150-500, and this is just the minimum threshold. To speed up arbitrage, it is usually necessary to configure multiple IP address servers.

Actual cases show that on a certain atomic arbitrage deployment site, in the past week, only 15 addresses earned more than 1 SOL, with a maximum of 15 SOL, while others were below 1 SOL and most were at a loss. Considering the costs of servers and nodes, almost all bots on this platform may be operating at a loss, and many addresses have stopped arbitraging.

Unveiling the "Risk-Free" Arbitrage Mystery

Overall data differs from reality, and the atomic arbitrage bots on Solana are still in a profitable state. However, it also cannot escape the "80/20 rule," where a small number of high-level arbitrage bots gain significant profits, while others become new retail investors.

The key to profiting from atomic arbitrage lies in discovering arbitrage opportunities. Taking the highest profit transaction as an example, this transaction purchased 3,679 grok tokens for 2.13 SOL at an average price of about $0.08, and then sold them for $199,000 at an average price of about $54.36. Obviously, this arbitrage took advantage of a gap in liquidity from a trading pool that was not noticed by large buyers who overlooked the pool's depth.

However, such opportunities are rare, and on-chain bots are all watching for similar opportunities. This kind of occasional large arbitrage is more like winning the lottery.

The recent rise of atomic arbitrage may stem from certain developers packaging it as a guaranteed profit business, offering a free version for novice users along with tutorials, and only charging a 10% commission when profits from arbitrage are made. In addition, they also charge subscription fees by assisting in setting up nodes, servers, and providing more IP services.

In fact, most users do not have a deep understanding of technology, and the arbitrage opportunity monitoring tools are similar, resulting in limited profits that cannot cover the basic costs.

Unless equipped with a technical foundation, unique arbitrage opportunity monitoring tools, and high-performance servers and nodes, most atomic arbitrage participants simply transition from being scammed in cryptocurrency trading to being scammed by buying servers and subscription fees. As the number of participants increases, the probability of arbitrage failure also rises. Taking the program with the highest yield as an example, the current transaction failure rate exceeds 99%, and almost all transactions fail, while participating bots still need to pay on-chain fees.

Before diving into this enticing wave of "atom arbitrage", potential participants should stay clear-headed, fully assess their own resources and capabilities, be wary of the overly packaged "guaranteed profits" promises, and avoid becoming another wave of leeks under the new "gold rush".