Backruns are the kind of MEV that Merkle Private Pool can capture.

A backrun refers to the practice of placing a bot's transaction right after a target transaction. A transaction can make a good target for a few reasons:

  • It's a swap with a large volume. Swapping a few $10,000 will make a great backrun target

  • It's a swap for a rarely traded token. Those swaps will create a big price differences that are not arbitraged often by the market.

Backrun bots fight the spot right after the target transaction to arbitrage any price difference created by that transaction.

For example, suppose you buy 100 ETH for 200,000 USDC on Uniswap. This will create a huge price inbalance with Sushiswap (or any other exchange). A bot will try to place a transaction right after yours to arbitrage between Unsiwap and Sushiswap and pocket the difference.

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