Solana on-chain MEV New Model: The Rise of Atomic Arbitrage, Opportunity or Trap?

As decentralized exchanges continue to introduce personalized priority fee options and anti-sniping mechanisms, the profits from sandwich attacks within the Solana ecosystem have significantly declined. As of May 6, this figure has dropped to 582 SOL, far below the daily average of about 10,000 SOL a few months ago. However, this is not the end of MEV, as a new form of atomic Arbitrage is becoming a major source of trading on the Solana chain.

Data shows that the proportion of atomic arbitrage on-chain has reached an astonishing level. On April 8th, the tip contribution from atomic arbitrage reached 74.12%, and during other periods, it basically remained above 50%. In other words, currently on the Solana chain, every two transactions may involve one atomic arbitrage.

Despite this, discussions about atomic arbitrage on social media are few and far between. Is this emerging arbitrage model a hidden treasure or another form of trap?

Atomic Arbitrage: A New Approach to MEV

Atomic arbitrage refers to executing multi-step arbitrage operations within a single, atomic blockchain transaction. Typical operations include purchasing assets at a low price on one DEX within the same transaction and then selling them at a high price on another DEX. Since the entire process is encapsulated in a single atomic transaction, it naturally eliminates counterparty risk and partial execution risk associated with traditional cross-exchange arbitrage or non-atomic arbitrage. If the transaction is successful, the profit is locked in; if it fails, no other assets are lost except for the transaction fee.

Atomicity is not designed for arbitrage, but is a fundamental property of blockchain that ensures state consistency. Arbitrageurs cleverly utilize this feature to bundle operations that would originally need to be executed in steps and carry risks (buying, selling) into a single atomic unit, thereby eliminating execution risks from a technical perspective.

Unlike traditional sandwich attacks or automated trading bots, atomic arbitrage focuses more on discovering price differences in multiple trading pools to seize arbitrage opportunities, rather than just focusing on a single trading pair.

Myth of Huge Profits and Harsh Reality

Recent data shows that there seems to be considerable profit potential in on-chain atomic arbitrage on Solana. In the past month, the total profit from atomic arbitrage reached 120,000 SOL (approximately $17 million). The most profitable address spent only 128.53 SOL to gain 14,129 SOL, achieving a return on investment of up to 109 times. The single highest profit is even more astonishing, earning 1,354 SOL by spending just 1.76 SOL, with a return rate of 769 times.

Currently, there are 5,656 atomic arbitrage robots recorded, with an average return of 24.48 SOL (3,071 USD) per address and an average cost of about 870 USD. Although this is not as high as the previous sandwich attackers' earnings, a monthly yield of 352% still seems to be a good business.

However, these data only reflect the on-chain transaction costs, and more investment is needed behind the scenes. Executing atomic arbitrage requires hardware support such as private RPCs and high-performance servers, with monthly costs around $150 to $500, and this is just the minimum threshold. To increase arbitrage speed, it is usually necessary to configure multi-IP address servers.

The actual situation may be even less optimistic. A certain atomic arbitrage deployment site shows that in the past week, only 15 addresses earned more than 1 SOL, with the highest being 15 SOL, while most earned less than 1 SOL or even incurred losses. Considering the costs of servers and nodes, almost all bots on that platform may be in a state of loss, and many addresses have stopped arbitrage.

Unveiling the Myth of "Risk-Free Arbitrage"

Although individual data is poor, the overall Solana atomic arbitrage bot is still in a profitable state. This aligns with the "Pareto principle", where a small number of high-level arbitrage bots generate substantial profits, while the majority become new "leeks".

The key to profiting from atomic arbitrage lies in discovering arbitrage opportunities. In the highest profit case, a trader purchased 3,679 grok tokens for 2.13 SOL (approximately $0.08 each) and then sold them for $199,000 (approximately $54.36 each). This clearly took advantage of a liquidity shortage in a trading pool, caused by a large order that did not take the pool's depth into account.

However, such opportunities are rare and highly competitive, more like "winning the lottery". The recent rise of atomic arbitrage may stem from certain developers packaging it as a "sure-win" business, offering a free version for novice users along with tutorials, only charging a 10% commission when arbitrage profits are made. Additionally, they also charge subscription fees for assisting in setting up nodes, servers, and providing multi-IP services.

In fact, due to the limited technical understanding of most users and the similarity of the arbitrage opportunity monitoring tools used, profits are minimal and difficult to cover basic expenses. Unless they have unique arbitrage opportunity monitoring tools and high-performance hardware support, most participants may simply transition from being cut by trading to being scammed by purchasing servers and subscription fees.

As the number of participants increases, the probability of arbitrage failure rises. The failure rate of a certain high-yield program's trades has exceeded 99%, with almost all trades failing, and participants still need to pay on-chain fees.

Before diving into the enticing wave of "atomic arbitrage," potential participants should remain sober, fully assess their resources and capabilities, be wary of the over-packaged "guaranteed profit" promises, and avoid becoming the chives in a new round of "gold rush."