ArcherDAO balances the interests of arbitrageurs, miners and ordinary users in a more decentralized way, thereby reducing the negative impact of MEV.
Author: First Class
With the large-scale application innovation of the DeFi business at the application layer of Ethereum, the block space has begun to be filled with complex transaction logic, and the transparency and openness of the block space and the unconfirmed transaction pool have provided participants in the price discovery process. There are new opportunities and challenges, and MEV is the product of this feature.
MEV often appears in the form of high gas fees and arbitrage obtained by miners, so it is often referred to as miner’s extractable value, which mainly occurs in arbitrage trading and liquidation in the DeFi field. The emergence of MEV is not necessarily an adverse effect, but when arbitrageurs or robots are chasing MEV, because of the PGA transaction mechanism of Ethereum (the mining union prioritizes the packaging of high gas transactions), in order to complete the preemptive transaction, a large amount of gas costs flow to Miners also cause network congestion and gas soaring, which has a negative impact on the Ethereum ecosystem.
There are currently two solutions to the negative impact of MEV. One is to allow arbitrageurs and miners to cooperate to avoid malicious competition among arbitrageurs; the other is to hide arbitrage opportunities, place transactions in black boxes, and give tip ( Additional benefits), allowing miners to selectively pack.
ArcherDAO is a network protocol that allows arbitrageurs and miners to directly cooperate. It uses a different solution from PGA, optimizes the interests of arbitrageurs and miners, and avoids wasted gas costs for arbitrage. The ArcherSwap that it currently launched is a solution different from other DEXs and is more in line with the development of Ethereum in the future.
basic introduction
team
There are 3 people in the official core team. The Stars Group, the company where the project leader and the operations leader once worked together, is a gaming entertainment company. The technical leader has certain experience in data analysis and related development. In terms of overall team strength, there is not much experience in blockchain technology.
funds
On October 6, 2020, Ascensive Assets completed the seed round investment, and the amount is unknown. At the same time, ArcherDAO sold 11 million ARCH tokens at a price of 1.3 million US dollars in the ICO (the average price of each token is 0.13 US dollars).
Business mechanism
There are 2 participating roles in ArcherDAO:
Supplier : A high-value (arbitrage opportunity) transaction is found on the chain, and ArcherDAO will send the transaction to the miner for priority execution.
Miners : ArcherDAO will give priority to high-value transactions to the miners participating in ArcherDAO. After the miners package the transaction, they can share the additional income of the transaction with Supplier.
In the operation of ArcherDAO, Supplier is like a digger of arbitrage and liquidation opportunities, and various possible profit opportunities are found everywhere. Once a possible opportunity is found, it will be sent to ArcherDAO, and ArcherDAO will route it to the miners to give them priority packaging. When the final arbitrage is successful, the arbitrage proceeds will be distributed proportionally between the supplier and the miner.
This part of the operation is for the B-side, that is, the Supplier and the miner, and there is no specific display interface on the official website. The current C-oriented application is ArcherSwap, the interface is as follows:
ArcherSwap interface
The function provided by ArcherSwap is to allow DEX users to trade with 0 slippage and 0 cancellation fee. 0 The slippage mechanism avoids the sandwich attack, that is, the transaction will only be executed when it succeeds, avoiding price fluctuations and causing a large amount of costs for transaction failure. At the same time, the application scenario of ArcherSwap is: if there is an arbitrage opportunity for transactions on it, such as a large transaction that causes the price of a certain Uniswap token to rise for a short time, then Supplier will arbitrage this opportunity and start arbitrage from Sushiswap. Transport and allow miners to prioritize the packaging of these two transactions. After the arbitrage is completed, a portion of the proceeds will be returned to the user as compensation. Behind all this operation, it is done by Archer Relay. Archer Relay can accept, coordinate and route all transactions, and coordinate signed transactions to various projects, users and miners.
Economic model
ArcherDAO’s token ARCH, the total amount is 100 million, and the specific distribution plan is as follows:
ARCH token distribution
ArcherDAO is an autonomous community. In the ArcherDAO ecosystem, ARCH currently has no specific application scenarios, only the governance token of the community. among them:
- Stake more than 20,000 ARCHs, and you can propose new proposals to ArcherDAO;
- Stake more than 10,000 ARCH to participate in a private Discord group;
- Stake ARCH, you can vote with ArcherDAO’s proposal.
Through autonomous ARCH proposals and voting, the ecology and procedures of ArcherDAO may be continuously expanded and improved.
The release of ARCH is as follows:
Token unlock
The current circulation of ARCH is: 10,072,761, and the circulating market value is 21.73 million US dollars. It is estimated that the circulating volume by 2021-07-01 is 25,572,761. At the price of 2.15 knives, the current market value is 54.98 million US dollars. The circulating volume on December 31, 2021 is 41,072,761. At a price of $2.15, the current market value is US$88.31 million.
Overview
1) ArcherDAO uses a method different from PGA, allowing Supplier and miners to directly cooperate to optimize the interests of all parties in the MEV. The waste of income generated by competition among arbitrageurs is avoided, and miners can also obtain corresponding MEV income.
2) Compared with the competing product KeeperDAO, it adopts the whitelist form of the hiding order book, that is, hidden arbitrage trading, so that the trader and the arbitrage robot are in the same camp, so as to avoid the high handling fee of the arbitrage robot for preemptive transactions. But KeeperDAO has not changed the mechanism that arbitrage robots need to perform PGA in the mempool (trading pool). Although there is a whitelist, the miners choose transaction packaging according to the size of the tip, and arbitrage opportunities are time-sensitive. In order to complete the transaction quickly, arbitrageurs still need a higher tip for the miners to pack.
3) ArcherDAO and KeeperDAO are essentially solving the negative problems of MEV, but in different ways. KeeperDAO, because only miners on the whitelist can package transactions, currently lacks liquidity and effectiveness, and can increase cooperation with other projects in the future to alleviate the problem. ArcherDAO’s supplier and miners directly cooperate with each other in terms of efficiency, and the achievable potential MEV may be higher.
4) MEV is a supplement to the DeFi field, not an unfavorable development for Ethereum. At present, KeeperDAO is relatively leading in market value and business, and has a first-mover advantage. ArcherDAO has just started, and how the two will evolve in the future depends more on the implementation of the project and the control of DAO governance.
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