When there is an arbitrage opportunity, trade bots start a bidding war for the right to capture the arbitrage. Once the bidding transactions are visible in public mempools, frontrunners, miners, and infrastructure operators are ready to copy and censor the arbitrageur’s transactions.
Front-running is zero-sum: the success of a frontrunner is directly proportional to the suffering of others. Recent events indicate that front-running is evolving away from Ethereum’s open architecture into pay-to-play infrastructure and mining. Side effects: Normal users lose: pointlessly issuing repeat transactions, and suffering punishing gas costs as a downstream effect of the bots.

Technical Architecture

The NodeReal Direct Route architecture proposes a network with several relayers who run a gateway between traders and validators. Relayers simulate trader’s bundles, and if there are no errors then forward them on to Direct-Route supported validators. Those validators then receive bundles and include them in blocks if it is profitable for them to do so.
The Direct-Route supported validators run an upgraded version of bsc-geth, which provides a private transaction pool + a sealed bid block space auction mechanism. It introduces a new eth_sendBundle RPC which standardizes the message format in the communication channel.
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