Data Revealed: How Much Profit Can MEV Bots Earn from CEX-DEX Arbitrage? - ChainCatcher

Author: Flashbots Data Analyst danning

Compiled by: Azuma, Odaily Planet Daily

How much profit can MEV arbitrage bots actually earn from CEX-DEX arbitrage?

Previously, no one could answer this question, but we are excited to announce that a new paper using formal methods for measurement has finally been published (paper link:

Super Concentrated Version

• Profit? Quite considerable, but not as much as you think；
• Bot strategies vary, but the excess returns of top traders mostly decay within 0.5 to 2 seconds;
• Market centralization is intensifying, and the field of block builders is no exception;
• However, as competition among blockchain builders intensifies, the profit margin for CEX-DEX arbitrage is shrinking year by year;

1. Bots are deeply integrated into the blockchain construction process in various ways;
2. The deeper the binding with the block builders, the thinner the "surface" profit (which is actually transferred to related parties);
3. The smaller the market share of block builders, the higher the actual profit margin retained by associated arbitrageurs.

• Even though it ranks among the top two in the industry, blockchain construction is still a tough business (with profits as thin as paper).

relatively detailed version

In the data we collected over 1 year and 7 months, the performance of 19 leading CEX-DEX arbitrage bots is as follows:

• The total trading volume reached 241 billion dollars;
• Extract $233.8 million in profit;
• Only retain net earnings of $90.1 million (paid $143.7 million in revenue share to blockchain builders)；

Overall, the average profit margin for CEX-DEX arbitrage is 38.5%.

Based on the market share analysis of arbitrageurs, we confirm that the MEV market centralization trend of CEX-DEX has reached a "highly monopolized" level.

Using the "League of Legends" rank label system proposed by @0x Rezin, we calculated the Binance markouts of the arbitrage bot and defined its "total income" before hedging using a weighted average.

Data shows that most CEX-DEX arbitrage signals disappear rapidly within seconds. The income peak can be observed through the median distribution — that is, the best hedging opportunity occurs in the 0.5-1.5 second range.

After deducting the share paid to the block builders, we obtained the upper limit valuation of Bot profits.

So how are the earnings of the current top three block builders after incorporating the profit adjustments for arbitrageurs?

Since rsync (currently ranked third) abandoned the "order flow war" last year, its market share has significantly plummeted. However, what has gone unnoticed is that its profit margin has rapidly rebounded from 5% to over 25%, bringing its overall profit margin (arbitrage + block building) to approximately 27%.

However, the top two blockchain builders have limited profitability.

During the 18-month data period, beaverbuild (currently ranked first) has a comprehensive profit margin of only 7.92% (including arbitrage income), while Titan (currently ranked second) has a profit margin of only 5.85% without proprietary arbitrage.

Clearly, the opaque "order flow" trading makes this situation harder to explain.

In addition to the known "block builders + arbitrageurs" combinations such as beaverbuild + SCP and rsync + Wintermute, the correlation analysis reveals another set of significant exclusive collaboration cases. Observing the 30-day rolling correlation between "Kayle's trading volume share in the Titan block building zone" and "Titan's market share" reveals some clues.

Our core conclusion is that block building is a low-margin business, and if one does not hold order flows with extremely high MEV value, there are currently no entry opportunities in the market.

In addition, the current block auction mechanism has serious inefficiency issues. On one hand, the subsidy mechanism squeezes the profits of block builders; on the other hand, exclusive cooperation fractures order flow, extending the waiting time for transactions to be on-chain.

But the current situation is not unchangeable. Flashbots' newly launched BuilderNet may be able to break the deadlock and enhance the earnings of block builders.

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