XBANKING has successfully utilized the full potential of MEV in its liquidity and staking pools, providing users with higher staking rewards than other providers.
In order to maximize returns, XBANKING uses a variety of financial products where MEV are highlighted.
Introduction to MEV
Maximal extractable value (MEV) refers to the phenomenon wherein operators find profitable opportunities across the blockchain by previewing pending transactions in the mempool. The mempool could be seen as a waiting area for yet-to-be-confirmed transactions. MEV operators would execute various strategies to extract value from users by reordering, inserting, and censoring transactions within blocks.
Additionally, they profit from more opportunistic MEV such as arbitrage and liquidations.
MEV rewards are split between various agents participating within the MEV ecosystem, these agents can generally be divided into these three categories: Searchers, builders, and validators.
Searchers: as their name would suggest, searchers are there to look for extractable value opportunities through different methods. So most of the arbitrage and liquidations that happen on-chain are performed by searchers. Searchers bundle transactions together and give them to builders, these bundles do not go through the mempool like normal transactions but go directly to the block builder.
Builders: Searchers group transactions together and the builders put these transactions into blocks for proposers. These blocks may not only contain the transaction of the searcher but can additionally contain transactions from the mempool. The builders are selecting the best opportunities found by searchers.
Validators: Sell blockspace to the searchers and builders and in return are rewarded with parts of the profits. The validator receives rewards for issuing new blocks and performing their consensus role to validate blocks.
MEV can also complement liquid staking protocols when their node operators run a MEV middleware.
MEV is similar to insider trading: a validator knows what will happen in their block and how it will affect DeFi applications and exploits this to their advantage through:
- Hijacking: The validator notices a profitable arbitrage transaction on a DEX, censors it, and puts the same transaction into the block on their behalf.
- Frontrunning: A trader conducts a significant DEX transaction that will push the token price up. The validator includes their transaction before that transaction to buy the token on the same exchange to get it cheaper and sell it after the price rises.
- Backrunning: The validator includes its transaction in the block so that it is executed immediately after a significant transaction by someone else. For example, to sell previously purchased tokens immediately after a large purchase on a DEX.
By how much can MEV boost your staking returns?
Profits from on-chain trading can be enormous. For example, the all-time largest MEV arbitrage on Ethereum in June 2022 yielded a gross profit of 2518.5 ETH; of this sum, 74.52 ETH went to the block proposer.
A well-thought-out MEV strategy can boost your staking returns significantly. For example, in March 2023, up to 15% of validator revenues have been derived from MEV so far.
Optimization of MEV rewards coupled with our performant infrastructure and round-the-clock supervision allows us to deliver highly competitive returns to our delegators, exceeding other validators.
Example:
Traditional native SOL staking offers rewards of ~7% APR, while XBANKING can offer up to 24% APR thanks to MEV staking.
Links
Staking: https://xbanking.org
Twitter: https://x.com/strongbuycrypto
Telegram: https://t.me/xbanking
