🤖Arbitrage

Arbitrage on the protocol can be broken down into two categories:

External arbitrage is arbitrage between the pools in Dyson Swap and some external market. Dyson Swap uses oracles where available, and also uses the midpoint mechanism as explained in the protocol design section. Because of those two points, external arbitrage opportunities are fewer than would be found against CLAMMs. Still, there will be some opportunities, and we're happy to help anyone integrate their bots for trading.

Internal arbitrage is triangular arbitrage between pools in the protocol. Any time someone trades against the protocol, there will be a subsequent arbitrage opportunity. Most of the arbitrage profits go to the liquidity providers, but there is a small percentage available to savvy searchers who find the mispricing. Dyson Swap runs a very simple implementation for calling these arbitrage functions just to keep things working, though we expect that experienced searchers would be able to catch these opportunities more quickly.

For internal arbitrage, all the swap legs are submitted at the same time using the remaining accounts feature of Solana. And again, we're happy to help anyone get setup to start running their own bots.