How do MEV bots detect profitable opportunities in real-time?

[aanaethan]

MEV bots uncover lucrative possibilities in real time by continually monitoring the mempool (the pool of unconfirmed transactions) and applying advanced algorithms to identify exploitable trends. This is how they do it.

• Memory Pool Scanning: MEV bots monitor pending transactions before they are verified on-chain. This enables them to identify arbitrage possibilities, liquidations, and possible frontrunning scenarios.
• Simulations: Bots simulate the results of putting their transactions before, between, or after others (for example, in sandwich attacks) in order to determine prospective gains.
• DEX Price Monitoring: They monitor numerous decentralized exchanges for price disparities and latency, allowing for real-time arbitrage.
• Gas optimization: MEV Bot frequently bid higher gas costs or utilize private relays such as Flashbots to prioritize transactions without exposing them to the public mempool.
• Automated Decision Engines: Once a successful opportunity has been identified, bots execute trades in milliseconds using smart contract logic.