Problem
There are MEV opportunities that are not profitable because of:
- Fee from liquidity protocols like Aave
- Periods of high gas
This leads to unbalanced liquidity pools
A Solution
High-level features
Like the Aave v3 flash liquidity feature but
- No fee
- Capped liquidity
- Gas optimized for small MEV searchers
Impact to users
Protocols
More balanced liquidity pools because there's a long tail of small MEV opportunity that's now profitable without the flash borrow fee- Bad debt that doesn't make sense to liquidate right now because of fees
Retail users
Can save gas when self-liquidation or doing a collateral swap- 15K gas savings = $10-20
New MEV searchers
Can try MEV strategies without breaking the bankSmol MEV searchers
Can do a long tail of MEV strategies that now become profitable
Open Question
- Where does the liquidity come from?
Need to put in $50-100K in stables from donors (Flashbots, other protocols, Aave Grants DAO)
Extension
- Using ETH directly for flash liquidity, and the letting the MEV searcher do whatever they want — as long as they return the ETH at the end
Community
Front-end for retail users to use the optimized gas