MEVbots explained

Maximum Extractable Value (MEV) bots scan the chain and look for transactions to "steal" assets from. There have been a number of approaches to hinder these Bots from operting on chain.

When a transaction moves through a liquidity pool, there is an oprotunity for slippage: where another transaction preceeds your transaction - changing the price, and effecting the amount of tao/alpha you receive.

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Example

An isolated transaction will have a small price impact due to the liqudity pool

But a large transaction in front of this one adds slippage:

In this example, 4% of the transaction is lost to slippage.

This is what the MEV bots do.

First fix: Limits

All transactions should set a slippage limit. This means - "hey, the price is x, and I am ok with a change of y% for the transaction."

The slippage limit should be small - a 4% slippage limit in the example above cost 20 alpha (~ 2 tao). For high liquidity subnets, you can be well below 1%.

The MEV bots calculate their MAX extraction on every transaction

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MevShield 2.0 is in development with more enhancements.