TheEqualizer
Atomic arbitrage Hook + Router that allows to do more frequent arbitrages discounting fees and redirecting slippage to liquidity providers
About
The problem it solves Once **Uniswap V4** is released, it will host a multitute of *pools* for the same *tokens* but with different *hooks*. This will lead to bunch of *pools* experiencing price deviations, allowing for swaps between them with low transaction costs due to flash accounting (all *pools' tokens* stored in a *single contract*). However, the majority of these pools might not attract sufficient attention from **solvers/arbitragers** due to a lack of liquidity and fees not allowing to perform profitable trade. At the same time, having trades is crucial for these pools as they might use hooks for *TWAP, rebalancing,* and other purposes. The proposed solution suggests discounting fee rates and distibuting only small share of arbitrage profit to arbitrager. It consists of two components: - **Discounted Fee Hook**: allows setting discounted fee for *Arbitrager* who is using *Arbitrage Router* (aka **TheEqualizer**) to perform trades much sooner than any *MEV actor*. The fee can be reduced by 10x or even set to 0, enabling *Arbitrage Router* to **fron-trun toxic arbitrage** before it becomes possible for later - **Arbitrage Router**: takes 4 essential arguments: **amount**, **tradeDirection**, **pool0** and **pool1** (one with actual and outdated prices). It performs trades and estimates the **profit**. In case of positive outcome, **minor 10%** share (can be lowered) goes as a bounty to the **initiator**, while the **major 90%** goes back to **LPs** utilizing *.donate()* function available in **UniV4** As a result, most of the slippage still benefits **Liquidity Providers** by capturing LVR. **Pool Managers** gain from updated prices and triggered hooks, while **Arbitragers** able to perform arbitrage more frequently
How it's made
Challenges we ran into Main challenge was to develop router that is able to do proper calculations and distribute profit