ArcherDAO: Allows arbitrageurs to work with miners to lower network Gas rates

Source: First Class

With the large-scale application innovation of the Ethereum application layer Defi service, the block space began to be filled with complex trading logic. The transparency and openness of the block space and unconfirmed trading pool created new opportunities and challenges for participants in the price discovery process. MEV is the product of this feature.

MEV is often in the form of high gas charges and arbitrage for miners, so it is often referred to as miner recoverable value, mainly for arbitrage trading and clearing in the DEFI area. The advent of MEV is not necessarily a negative impact, but when arbitrageurs or bots chase MEV, because of Ethereum's PGA trading mechanism (mine workers package high-gas deals first), a lot of gas fees flow to miners in order to complete the first trade, which also causes network congestion and gas spikes. This will have a negative impact on the Ethereum ecosystem.

At present, there are two solutions to the negative impact of MEV. One is to let arbitragers and miners cooperate to avoid the malicious competition among arbitragers. The other is to hide arbitrage opportunities by putting trades in a black box and giving the miners a tip (extra return), giving them the option of packaging.

ArcherDAO is a network protocol that allows arbitrageurs and miners to work together directly. It uses a different solution from the PGA to optimize the interests of arbitrageurs and miners and avoid the wasted gas costs to achieve arbitrage. ArcherSwap is a solution that is different from other Dex's and is more in line with Ethereum's future development.

Basic introduction

team

The core team of the official show consisted of three people. The project leader and The operation leader once worked together with The Stars Group, a spinach entertainment company, and The technical leader has certain experience in data analysis and related development fields. In terms of overall team strength, I don't have much experience in blockchain technology.

money

On October 6, 2020, the seed round of investment will be completed by Ascensive Assets with unknown amount. Meanwhile, Archerdao sold 11 million Arch tokens in the ICO for $1.3 million (average price per token is $0.13).

Business mechanism

There are two participating roles in ArcherDAO:

Suppper: Found a high value (arbitrage opportunity) trade on the chain and ArcherDAO sends it to the miner for priority execution.

Miners: Archerdao will send high-value trades first to Archerdao's participating miners, who will then package the trades and split the additional revenue with Suppper.

In Archerdao's run, Suppper acts like a miner of arbitrage and clearing opportunities, spotting all sorts of potential profits. Once a potential opportunity is found, it is sent to the ArcherDAO, who routes it to the miners and gives them priority to package. When the arbitrage finally succeeds, the proceeds of the arbitrage will be split proportionally between Suppper and the miners.

This will be done on the B side, Suppper and miner, and will not be shown on the website. The current C-oriented application is ArcherSwap, with the interface as follows:

ArcherSwap interface

ArcherSwap provides a feature that allows Dex users to trade with 0 slip points and 0 cancellation fees. The zero-slip mechanism avoids the sandwich attack, in which a trade is executed only if it succeeds, and avoids the price fluctuations that result in a large fee for a failed trade. Meanwhile, the application scenarios of ArcherSwap are as follows: If there is an arbitrage opportunity, such as a large trade that increases the price of a Uniswap token for a short period of time, Suppper will arbitrage the opportunity, move it from Sushiswap, and give the miner the priority to package the two trades. After the arbitrage, Suppper will return a portion of the profit to the user. To compensate. All of this is done by Archer Relay. Archer Relay accepts, coordinates, and routes all transactions, coordinating signed transactions to individual projects, users, and miners.

Economic models

Archerdao's token ARCH has a total amount of 100 million. The specific distribution plan is as follows:

ARCH token allocation

Archerdao is an autonomous community. At present, ARCH has no specific application scenarios in the Archerdao ecology, but is only the governance token of the community. Among them:

Pledge more than 20,000 ARCHES to put forward new proposals for Archerdao;

Pledge more than 10,000 ARCHES, and you can participate in private Discord groups;

Pledging Arch can be voted on with Archerdao's proposal.

Through autonomous ARCH proposals and votes, the ecology and program of Archerdao may be continuously expanded and improved.

Arch is released as follows:

Tokens to unlock

The current circulation of ARCH is 10,072,761 pieces, with a circulating market value of US $21.73 million, and the estimated circulation by 2021-07-01 is 25,572,761 pieces, with a circulating market value of US $54.98 million at the price of $2.15. The circulation of 2021-12-31 is 41,072,761, giving a floating market value of $88.31 million at a price of $2.15.

Comprehensive evaluation of

1) Argerdao uses a different approach than the PGA to allow Suppper and the miners to work directly to optimize the interests of all parties in the MEV. The waste of income generated by competition among arbitrageurs is avoided, and the corresponding MEV income can also be obtained by miners.

2) Compared with the rival product KeeperDao, it adopts the "hiding order book" whitelist form, that is, hiding the arbitrage trade, putting the trader and the arbitrage robot in the same camp to avoid the high handling fee caused by the arbitrage robot in order to trade first. But KeeperDAO does not change the mechanism that arbitrage robots need to PGA in MBlockquotePool. Although there is a whitelist, miners will choose the transaction package according to the size of TIP, and arbitrage opportunity is time-sensitive. In order to complete the transaction quickly, arbitragers still need a higher TIP to get miners to package.

3) Both ArcherDAO and KeeperDAO are essentially solving the negative problems of MEV, but in different ways. Due to the fact that only miners on the white list can package transactions, Keeperdao currently lacks liquidity and effectiveness. In the future, it can increase cooperation with other projects to alleviate this problem. However, Suppper of Archerdao works directly with miners, which is more efficient, and the potential MEV that can be realized may be higher.

4) MEV complements the DEFI field and is not a negative development for Ethereum. At present, Keeperdao is relatively ahead in market capitalization and business, occupying first mover advantage. ArcherDAO has just started, and how the two evolve in the future depends more on the implementation of the project and the control of DAO governance.

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