Как разработать бота MEV и flashbot на языке Python и js

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Author: code666
Article for xss

How to develop a MEV bot and a flashbot with python and js language

MEV (Miner Extractable Value) bots are computer programs used in the field of cryptocurrencies to exploit profit maximization opportunities offered by front-running transactions¹. Front-running transactions are transactions that take advantage of information on pending transactions in the buffer memory (mempool) to anticipate or influence the order of execution of transactions on the blockchain. MEV bots use complex algorithms to analyze real-time market data and identify profitable trading opportunities. They can automatically execute buy and sell orders across different exchanges, while taking into account factors like fees and liquidity. MEV bots offer many benefits to cryptocurrency traders and investors, but they also raise questions about market transparency and fairness.

Flashbots are a type of MEV bot that use the Flashbots service to submit private transactions to miners on the Ethereum blockchain. Private transactions are transactions that are not publicly broadcast in the mempool, but are sent directly to miners via a parallel network called mev-relay. Flashbots allow MEV researchers to capture profitable trading opportunities without paying high transaction fees or facing competition from other MEV bots. Flashbots also help reduce the negative impact of MEV bots on market transparency and fairness, avoiding bidding wars and network congestion.

In this article, we will see how to develop a MEV bot and a flashbot with python and js language.
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First things first: Choosing a trading strategy

The first step to developing a MEV bot or flashbot is to choose a trading strategy that suits your goals and risk level. There are several types of possible trading strategies, such as:

- Arbitrage: this involves exploiting price differences between different cryptocurrency exchange platforms, such as Uniswap, Sushiswap, Balancer, Curve, etc. These platforms are based on the Ethereum blockchain and allow users to trade ERC-20 tokens without an intermediary. MEV bots or flashbots can take advantage of price disparities and market inefficiencies between these platforms by executing front-running trades or rapid arbitrages.

- The sandwich: this involves exploiting price movements caused by large volume transactions on exchange platforms. MEV bots or flashbots can insert transactions before and after the target transaction, in order to take advantage of the token price variation. For example, if a user wants to buy a large amount of A tokens on Uniswap, a MEV bot or flashbot can buy A tokens before the target transaction, and then sell them after the target transaction, taking advantage of the token price rising. HAS.

- Liquidation: This involves exploiting the undercapitalized positions of users who borrow cryptocurrencies on decentralized lending platforms, such as Aave, Compound, MakerDAO, etc. These platforms require users to post cryptocurrency collateral to borrow other cryptocurrencies. If the value of the collateral falls below a certain threshold, the position is liquidated and the collateral is sold at auction. MEV bots or flashbots can take advantage of these liquidation opportunities by submitting favorable offers to redeem the collateral at a low price.

There are other types of trading strategies possible, but we will focus on these three examples to illustrate the process of developing an MEV bot or flashbot.

Prerequisites

To develop a MEV bot and flashbot, you will need the following:

- Python 3.6 or higher
- Pip, the Python package manager³
- Node.js, a JavaScript runtime⁴
- Npm, the Node.js package manager⁴
- An Ethereum account with funds in ETH
- An access provider to the Ethereum blockchain, such as Infura
- A code editor, like Visual Studio Code

Installing dependencies

To install the dependencies necessary for developing a MEV bot and flashbot, you can use the following commands:

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# Install the Python libraries
pip install web3
pip install eth-account
pip install requests

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# Install the Node.js libraries
npm install ethers
npm install @flashbots/mev-geth
npm install @flashbots/ethers-provider-bundle

Development of a MEV bot

A MEV bot is a program that analyzes pending transactions in the mempool and sends front-running transactions to miners to take advantage of profitable trading opportunities. An example of a MEV bot strategy is arbitrage, which involves exploiting price differences between different exchange platforms².

To develop a MEV bot, you can follow the following steps:

1. Create a Python file

Create a Python file named `mev_bot.py` in your code editor.

2. Import the libraries

Import the Python libraries necessary for the MEV bot to work:


Python: Скопировать в буфер обмена

# Import libraries
import web3
import eth_account
import requests
import json

3. Define variables

Set the following variables:

- `provider`: the URL of your Ethereum blockchain access provider, for example Infura
- `w3`: the web3 instance, which allows you to interact with the Ethereum blockchain
- `account`: the object that represents your Ethereum account, with your address and your private key
- `uniswap_router`: the address of the smart contract of the Uniswap router, which allows ERC-20 tokens to be exchanged
- `token_a`: the address of the ERC-20 token you want to sell
- `token_b`: the address of the ERC-20 token you want to buy
- `amount_a`: the quantity of token A that you want to sell
- `amount_b`: the minimum quantity of token B that you want to receive
- `deadline`: the Unix timestamp at which the transaction must be executed


Python: Скопировать в буфер обмена

# Set variables
provider = "https://mainnet.infura.io/v3/your_project_id"
w3 = web3.Web3(web3.Web3.HTTPProvider(provider))
account = eth_account.Account.from_key("your_private_key")
uniswap_router = "0x7a250d5630B4cF539739dF2C5dAcb4c659F2488D"
token_a = "0x6B175474E89094C44Da98b954EedeAC495271d0F" # DAI
token_b = "0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2" # WETH
amount_a = 1000000000000000000 # 1 DAI
amount_b = 0 # to be determined
deadline = w3.eth.get_block('latest')['timestamp'] + 300 # 5 minutes

4. Build the transaction

Construct the transaction that swaps token A for token B on Uniswap, using the `swapExactTokensForTokens` function of the Uniswap router smart contract. This function takes as parameters:

- `amountIn`: the quantity of token A to sell
- `amountOutMin`: the minimum quantity of token B to receive
- `path`: the exchange path, which is an array of token addresses
- `to`: the address of the recipient of the B tokens
- `deadline`: the Unix timestamp at which the transaction must be executed

To determine the value of `amountOutMin`, you can use the `getAmountsOut` function of the Uniswap router smart contract, which returns the amount of tokens you will receive for a given amount of tokens to sell, based on the current exchange rate.


Python: Скопировать в буфер обмена

# Build the transaction
uniswap_contract = w3.eth.contract(address=uniswap_router, abi=uniswap_abi) # uniswap_abi is the ABI code of the Uniswap router smart contract, which you can find here: https://etherscan.io/address/0x7a250d5630B4cF539739dF2C5dAcb4c659F2488D#code
amounts_out = uniswap_contract.functions.getAmountsOut(amount_a, [token_a, token_b]).call() # call the getAmountsOut function to get the amount of tokens B to receive
amount_b = amounts_out[1] # assign the amount of tokens B to receive to the amount_b variable
tx = uniswap_contract.functions.swapExactTokensForTokens(amount_a, amount_b, [token_a, token_b], account.address, deadline).buildTransaction({ # build the transaction with the function swapExactTokensForTokens
'nonce': w3.eth.get_transaction_count(account.address), # set the nonce, which is the number of transactions sent by the account
'gas': 200000, # define the gas, which is the amount of calculation units needed to execute the transaction
'gasPrice': w3.eth.gas_price # define the gasPrice, which is the price of gas in wei
})

5. Sign and send the transaction

Sign the transaction with your private key, then send it to miners via the Ethereum blockchain provider. You can use web3's `send_raw_transaction` function to send the signed transaction.

Python: Скопировать в буфер обмена

# Sign and send the transaction

signed_tx = account.sign_transaction(tx) # sign the transaction with the private key

tx_hash = w3.eth.send_raw_transaction(signed_tx.rawTransaction) # send signed transaction

print(f"Transaction sent: {tx_hash.hex()}") # display the transaction hash

6. Track transaction status

You can track the transaction status using web3's `get_transaction_receipt` function, which returns an object containing information about the transaction, such as status, block, gas used, etc. You can use a while loop to wait for the transaction to be confirmed.

Python: Скопировать в буфер обмена

# Track transaction status

receipt = None # initialize receipt variable to None

while receipt is None: # while receipt variable is None

receipt = w3.eth.get_transaction_receipt(tx_hash) # call the get_transaction_receipt function with the transaction hash

print("Waiting for confirmation...") # display a waiting message

time.sleep(5) # wait 5 seconds

print(f"Confirmed transaction: {receipt}") # display the transaction receipt

Development of a flashbot

A flashbot is a type of MEV bot that uses the Flashbots service to submit private transactions to miners on the Ethereum² blockchain. Private transactions are transactions that are not publicly broadcast in the buffer (mempool), but are sent directly to miners via a parallel network called mev-relay². Flashbots allow MEV researchers to capture profitable trading opportunities without paying high transaction fees or facing competition from other MEV² bots. Flashbots also help reduce the negative impact of MEV bots on market transparency and fairness, avoiding bidding wars and network congestion².

To develop a flashbot, you can follow the following steps:

1. Create a JavaScript file

Create a JavaScript file named `flashbot.js` in your code editor.

2. Import the libraries

Import the Node.js libraries necessary for the flashbot to work:

JavaScript: Скопировать в буфер обмена

const ethers = require("ethers"); // to interact with the Ethereum blockchain
const { FlashbotsBundleProvider } = require("@flashbots/ethers-provider-bundle"); // to interact with the Flashbots service

3. Define variables

Set the following variables:

- `provider`: the instance of ethers.providers.JsonRpcProvider, which allows you to interact with the Ethereum blockchain via an access provider, such as Infura
- `wallet`: the instance of ethers.Wallet, which represents your Ethereum account, with your address and your private key
- `flashbotsProvider`: the FlashbotsBundleProvider instance, which allows you to interact with the Flashbots service via the provider and the wallet
- `uniswapRouter`: the ethers.Contract instance, which represents the smart contract of the Uniswap router, which allows ERC-20 tokens to be exchanged
- `tokenA`: the instance of ethers.Contract, which represents the ERC-20 token you want to sell
- `tokenB`: the instance of ethers.Contract, which represents the ERC-20 token you want to buy
- `amountA`: the quantity of token A that you want to sell
- `amountB`: the minimum quantity of token B that you want to receive
- `deadline`: the Unix timestamp at which the transaction must be executed

JavaScript: Скопировать в буфер обмена

// Define variables
const provider = new ethers.providers.JsonRpcProvider("https://mainnet.infura.io/v3/your_project_id"); // create the provider with the URL of your Ethereum blockchain access provider, for example Infura
const wallet = new ethers.Wallet("your_private_key", provider); // create the wallet with your private key and the provider
const flashbotsProvider = await FlashbotsBundleProvider.create(provider, wallet); // create the flashbotsProvider with the provider and the wallet
const uniswapRouter = new ethers.Contract("0x7a250d5630B4cF539739dF2C5dAcb4c659F2488D", uniswapAbi, wallet); // create the Uniswap router contract with its address, ABI code and wallet
const tokenA = new ethers.Contract("0x6B175474E89094C44Da98b954EedeAC495271d0F", erc20Abi, wallet); // create the contract for token A (DAI) with its address, its ABI code and the wallet
const tokenB = new ethers.Contract("0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2", erc20Abi, wallet); // create the contract for token B (WETH) with its address, its ABI code and the wallet
const amountA = ethers.utils.parseUnits("1.0", 18); // define the quantity of token A to sell (1 DAI)
const amountB = ethers.BigNumber.from(0); // define the minimum quantity of token B to receive (to be determined)
const deadline = (await provider.getBlock("latest")).timestamp + 300; // set the Unix timestamp at which the transaction should be executed (5 minutes)

4. Build the transaction

Construct the transaction that swaps token A for token B on Uniswap, using the `swapExactTokensForTokens` function of the Uniswap router smart contract. This function takes as parameters:

- `amountIn`: the quantity of token A to sell
- `amountOutMin`: the minimum quantity of token B to receive
- `path`: the exchange path, which is an array of token addresses
- `to`: the address of the recipient of the B tokens
- `deadline`: the Unix timestamp at which the transaction must be executed

To determine the value of `amountOutMin`, you can use the `getAmountsOut` function of the Uniswap router smart contract, which returns the amount of tokens you will receive for a given amount of tokens to sell, based on the current exchange rate.



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// Build the transaction

const amountsOut = await uniswapRouter.getAmountsOut(amountA, [tokenA.address, tokenB.address]); // call the getAmountsOut function to get the amount of tokens B to receive

amountB = amountsOut[1]; // assign the amount of tokens B to receive to the variable amountB

const tx = await uniswapRouter.populateTransaction.swapExactTokensForTokens(amountA, amountB, [tokenA.address, tokenB.address], wallet.address, deadline); // construct the transaction with the swapExactTokensForTokens function

5. Sign and send the transaction

Sign the transaction with your private key, then send it to miners via the Flashbots service. You can use flashbotsProvider's `sendBundle` function to send the signed transaction.

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// Sign and send the transaction

const signedTx = await wallet.signTransaction(tx); // sign the transaction with the private key

const blockNumber = await provider.getBlockNumber(); // get the current block number

const bundleResponse = await flashbotsProvider.sendBundle([signedTx], blockNumber + 1); // send the signed transaction to the next block

console.log(`Transaction sent: ${bundleResponse.bundleHash}`); // display the bundle hash

6. Track transaction status

You can track the transaction status using bundleResponse's `receipt` function, which returns a promise that resolves to an object containing information about the transaction, like status, block, gas used, etc. You can use the `await` function to wait for the promise to resolve.

JavaScript: Скопировать в буфер обмена

// Track transaction status

const receipt = await bundleResponse.receipt(); // wait for the transaction receipt

console.log(`Transaction confirmed: ${receipt}`); // display the transaction receipt

Conclusion

In this article, we saw how to develop a MEV bot and a flashbot with the python and js language, with code examples and how to set them up. We explained the concept of on-chain value mining (EMV) and the pros and cons of MEV bots. We also presented the Flashbots service, which allows private transactions to be submitted to miners on the Ethereum blockchain, avoiding high transaction fees and competition from other MEV bots. We showed how to build, sign and send an arbitrage transaction on Uniswap, using the web3, ethers and flashbots libraries. We also explained how to track the transaction status and check its confirmation.


Thank you for your attention and see you soon!