In this article, you will learn about what is the Matic arbitrage bot. There has been a lot of talk about Polygon “flipping” Ethereum — at first in terms of transaction count and in terms of active user count — rising to a record high of 566.516 active addresses, surpassing Ethereum for the first time. However, it’s also been reported in a Polygon forum that the network has been under a spam attack, which has been inflating network utilization numbers by 90%.
What is the Matic Arbitrage Bot?
Matic Arbitrage Bot is a software program that is designed to take advantage of price discrepancies of cryptocurrencies on different exchanges that support the Matic network. The bot scans multiple exchanges simultaneously and identifies price discrepancies in real-time. The bot automatically executes trades on behalf of the user, buying on the lower-priced exchange and selling on the higher-priced one, thereby making a profit from the price difference.
In simple terms, Matic Arbitrage Bot is a tool that helps traders take advantage of the price differences between different exchanges to make profits. However, it is important to note that the bot's effectiveness depends on market conditions and volatility, and there are also risks involved in using any trading bot.
Matic Arbitrage Bot Behind the Scam Attacks
On average, the top 10 DApps in terms of weekly transaction count add up to 3 million transactions per week, or 420k transactions per day. With 4M-6M transactions happening on the whole network daily, the top 10 applications account for less than 10% of the total network.
With a simple query it is possible to find the top 10 addresses in terms of total transactions. The top two contracts have been interacting with 2 million transactions daily — which accounts for roughly 30% of the network's total transaction count. These two contracts are arbitrary bots. They are the target of millions of transactions every day, and initiate thousands of daily transactions to DEXes themselves.
An arbitrary bot is a bot that captures the different exchange rates between platforms to make profit. For example, if Uniswap has 3700$ / ETH and Sushi has 3600$ / ETH, you can simultaneously buy on Sushi and sell on Uniswap to capture the 100 $ difference.
The likely theory is that the owner just wants to spam the contract so others cannot front-run the real trade. So someone has a bot that floods a block with noise to protect from front running, as opposed to using priority fees to ensure they are always first in the block.
On Oct. 5. 2021. the network's co-founder recommended increasing the minimum transaction fee from 1 gwei to 30 gwei - raising the cost of spamming an entire day to $30.000 to disincentivize spam transactions from happening.
Shortly after the adjustment, the spam transactions dropped 75% from 2M to just over 500k TPD. Polygon's daily transactions also dropped 50% from 6M to just over 3M TPD.
Bottom Line
It's worth noting that even with the 75% drop, spam transactions still account for 16.7% of the network's daily transactions. This means bots are still spending around $5.000 a day at the current gas price, or 83% of their daily profit, to keep this operation going. This article is about what is Matic arbitrage bot.
