iRobot

LP Pool Core Concept https://uniswap.org/docs/v2/core-concepts/pools/

It’s a big problem

I think in the early days we underestimated how much value would be sucked out by these bots. Not only are arbitrage bots making millions of dollars, but they also front run on the blockchain (these bots are known as vampires). When you buy or sell a token on a DEX, an arbitrage bot will push the price up to make you pay the maximum with slippage, then sell it. So you end up with tokens that are literally worth less than they would have been in a single block.

Is this a Rune problem?

Not at all. Generally speaking, most projects get hyped for a quick flip before they’re released, and dumped upon release. Then you’ve got the paper hands who say they’re in it for the long term, but have shiny object syndrome and move to the next thing 2–3 weeks later. On a normal exchange, this would be fine. But not Uniswap. Not PancakeSwap. As these paper hands leave, the loyal holders and newcomers are buying, but the bots are taking almost everything off the top. Whales know this, so they buy before a release, and dump on release day. They know the bots will help push the price down so they can keep doing this. What you get is hundreds of projects in a slow death spiral literally due to some ridiculous mechanic nobody knows is happening. Some know it’s bots, but don’t quite know the true impact of it. Others make up some other reason, because opinions are like assholes and everybody’s got one. What they don’t know, is the reason why everybody does pump n dumps is because doing a long-term project on a Uniswap-style AMM is a losing battle. Winning this battle will take tricks never seen before. At least I don’t think they’ve been done, but I’m pretty sure I can pull it off.

What are the solutions?

  1. Move to a centralized exchange. There’s still whales, but at least the value isn’t being sucked dry by bots that don’t know what you do or care. Well, that’s not totally true, you still have to deal with SBF and he’s ruthless but not as much as the bots.
  2. Fork PancakeSwap and change just enough that they won’t catch on to you until you’re already in top 100.
  3. Deter them with transfer fees and other mechanics.
  4. Write a better bot.

What will Rune do?

Well, we’re certainly not moving to a centralized exchange at this time.

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Rune

Rune

11.8K Followers

The world’s first and most comprehensive dark fantasy metaverse driven by crypto and non-fungible tokens (NFTs). Battle, win & collect items.