Cross-Rollup MEV: Non-Atomic Arbitrage Across L2 Blockchains

• URL: http://arxiv.org/abs/2406.02172v2
• Date: Thu, 17 Oct 2024 09:02:16 GMT
• Title: Cross-Rollup MEV: Non-Atomic Arbitrage Across L2 Blockchains
• Authors: Krzysztof Gogol, Johnnatan Messias, Deborah Miori, Claudio Tessone, Benjamin Livshits,
• Abstract summary: This study quantifies the potential non-atomic MEV on Layer-2 (L2) blockchains by measuring the arbitrage opportunities between cross-rollup and DEX-CEX. By analyzing the costs of swap on L2s and price discrepancies cross-rollup and DEX-CEX, we identify more than 500 000 unexplored arbitrage opportunities.
• Score: 6.892626226074608
• License:
• Abstract: This study quantifies the potential non-atomic MEV on Layer-2 (L2) blockchains by measuring the arbitrage opportunities between cross-rollup and DEX-CEX. Over recent years, we observe a shift in trading activities from Ethereum to rollups, with swaps on rollups occurring 2-3 times more frequently, albeit with lower trade volumes. By analyzing the costs of swap on L2s and price discrepancies cross-rollup and DEX-CEX, we identify more than 500 000 unexplored arbitrage opportunities. In particular, we find that these opportunities persist, on average, for 10 to 20 blocks, necessitating the modification of the Loss Versus Rebalancing (LVR) metric to prevent double-counting. Our findings indicate that the arbitrage opportunities in Arbitrum, Base, and Optimism range between 0.03% and 0.05% of the trading volume, while in the ZKsync it fluctuates around 0.25%.

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