With the signing of U.S. President Joe Biden’s Executive Order on Digital Assets on March 9th, the other shoe people have been waiting for has finally dropped. Although the sound is not as loud as some might speculate, the wave has been spreading to the U.S. Department of State, U.S. Treasury, Commence, DOJ, DHS, FTC, SEC, EPA, DOE, USAID, FRB, etc., etc., some of which have never shown themselves in the movies and TV plays. Dive into the text of the EO; you can see U.S. Government is putting mitigating illicit finance risks and international law-abiding as the top priority. Over ten agencies have 90 days to submit their views on illegal finance risks and how to strengthen international law enforcement cooperation.
It’s worth noting that Section 5 of the EO emphasizes measures to Protect Consumers, Investors, and Businesses against fraud and theft, other statutory and regulatory violations, privacy and data breaches, unfair and abusive acts or practices. Transparency would play a big part in these measures, on which we have been working since the beginning. Galaxy Digital Research’s weekly brief has a good take on the policy. Feel free to subscribe to this free insightful newsletter.
The unexpectedly positive attitude of the U.S. Government triggered confidence in the market. According to crypto.com, the top 20 DeFi tokens market cap increased 3.76% in Week 10, 5.61% since Week 9.
DeFillama’s Total TVL also climbed over US$155 billion.
The hope also came from Bain Captial. On March 8th, the $155 billion giant announced a $560 million fund — Bain Capital Crypto (BCC) focusing on the crypto ecosystem exclusively with interests in DeFi and Web 3.
Bloomberg reported last Friday that Fir Tree Capital Management hedge fund made a short wager on Tether. However, the price of USDT has remained unshakeable, which might remind people of last year’s GameStop frenzy. Someone will make a meme like this below.
A good rest for the incoming blast
This chart shows the weekly profit amount of BSC and Ethereum of 2022.
The daily profit amount of this year is here:
The yellow bar is the daily profit of arbitrages on Ethereum, orange bar BSC. You can also examine Ethereum’s seven-day simple moving average as the dotted line, solid line BSC’s seven-day SMA.
To be more specific, take a look at this table.
Compared to last week, this week’s number decreased in general. The trend is evident on BSC. A considerable decline in transaction frequency caused the volume to plummet. But BSC’s low gas fees continue to be a whopping incentive for MEV. The overall six-times transaction count generated less profit than Ethereum, but BSC’s advantage of ROI caused by lower cost is here to stay.
The last few weeks’ data looks like indicating the market is taking some rest to prepare for something crazy.
Same Ol’ Same Ol’ Pareto
However, the trend in terms of percentage is likely the same as last week. The first one of the two charts below is of ETH, the second BSC. Regarding the arbitrages on Ethereum, the top 10 contracts of week 10’s transactions’ count are 25% of the total, but their profit is 70%. BSC is pretty much identical, except for the lower cost. With slight improvement, the Pareto principle still rules here like last week.
In the meantime, both chains’ mean and median profits have decreased. For example, last week’s Ethereum arbitrage average profit was $91.6, over 30% lower this week. Others suffered the same comparable loss, with the exception of BSC’s median profit and cost and mean cost, all of which remain minute.
Day by Day of Week 10
Separate the data into seven days of Week 10. The lines of the charts below indicate the day’s profit, and the bars are the daily frequency.
Although searchers’ maneuver has been stable during the week, Saturday sees the least transactions on both chains. In terms of profit, Ethererum enjoyed a good start on Sunday, March 6th, accumulating $321K gains, but it ended badly with only $96K profit on Saturday.
BSC’s daily profit peaked at almost $215K on Thursday, March 10th, then a sharp slumping to $126K the next day on more or less the same number of transactions.
The following chart reveals the average daily arbitrage profit of Week 10 on both chains. Ethereum surrendered the early gains; however, BSC has been steady as a rock.
Such A Spatial DeFi Universe
EigenPhi currently identifies four types of Arbitrage: Combination, Sandwich, Spatial, and Triangular. The stacked area charts below split the profit of this week’s daily number among those types.
We can learn that Spatial and Sandwich were the dominating force on ETH. However, Triangular and Spatial had been killing it on BSC.
Read the charts below to help you understand how the profit was distributed in percentage.
After reviewing these data, if you want to discover more insights on DeFi, why don’t you visit our website: https://eigenphi.io/ with the newly designed UI? We recently added Hot Liquidity Pools, Hot Tokens, and Liquidity Pool’s details. So now you can roam around the details of contracts, liquidity pools, and transactions to discover the underlying structures of DeFi. This level of transparency is vital for all the participants with good wills because we can’t afford another financial catastrophe like the Wall Steet of the real world in the era of Web3.
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