The crypto economy is increasingly influencing our daily lives, and today no one will be surprised by such terms as “blockchain”, “transaction”, “miner”, etc. The wide coverage of the crypto industry in various areas of our lives and business has led to the fact that the cryptocurrency market began to develop at a fairly rapid pace, and applications based on smart contracts are gaining unprecedented popularity. Such popularity is based, first of all, on the opportunity to receive various kinds of benefits, especially in cases where it is possible to receive information about transactions in real-time. Taking advantage of the ethereum mempool api, any user can receive their MEV (Maximal Extractable Value).
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The essence of the transaction mempool
So, almost everyone who has encountered this technology at least once knows that blockchain is nothing more than a distributed registry. However, perhaps not everyone paid enough attention to a certain “waiting place” in which transactions can remain for some time before they enter the block. This waiting area is called “the mempool”. Based on the nature of the blockchain, as an array of information in which each information block contains a link to the previous block, the integrity and reliability of all information obtained as a result of the entire transaction history can be guaranteed. The blockchains of the most popular ecosystems, such as Bitcoin and Ethereum, are protected by a network of computers called miners. At the same time, the network of these computers itself is decentralized. It is the miners who are the subjects of the network who each time form and link transactions into successive blocks. Miners take transactions to form blocks from the mempool, and transactions are entered into the mempool itself by ordinary network users.
As soon as a transaction enters the network, it is built into a kind of waiting queue. This queue does not at all guarantee that in the block itself, transactions will be located in exactly the same sequence with which they entered the mempool (hereinafter referred to as the pool) of the network. Most often, a certain volume of transactions with the highest commissions is selected. The reason for this is obvious – to ensure consensus, which supports the operation of the blockchain network, miners spend their resources. Since ensuring PoW is a serious algorithmic problem, its solution requires large resource costs, in particular, high power consumption. To compensate for these costs, miners use transactions associated with the emission of coins, when, if a transaction is added to a block, a certain amount of these coins is credited to the miner’s account. It is the miner who wins the block who determines the order in which transactions are placed in the block, and this order is followed by all other miners.
Transaction pool monitoring
The ability to monitor the transaction pool provides network miners with a good opportunity to earn additional income. The basis for monitoring is the fact that while a particular transaction is in the pool, it has not yet been executed. That is, it can be canceled or, for example, pushed back by wedging another transaction in front of it and, thereby, preventing the first transaction from being executed.
To monitor a transaction pool, for example, Ethereum in the Javascript language, you can use scripts created and offered by different developers. In order to understand how such scripts work, you need to refer to the documentation of the Web 3 library for Javascript. However, it should be noted that it is impossible to directly work with the Ethereum network from a Java script, therefore, to implement the project, the RPC (Remote Procedure Call) service is needed. Access to it can be obtained in different ways, on a paid or free basis, depending on the scope and objectives of the project. After gaining access to the network, the user can go directly to the script, obtain the appropriate subscription and, using a hash, request additional information for each transaction. At the same time, he can display the address from which a particular transaction was called, how many others were transferred, the price of gas, the amount of gas itself, what additional data was displayed, and the current date. In other words, this is monitoring the transaction pool by the user for some of his purposes.
Monitoring as a source of additional income
As mentioned above, the ultimate goal of monitoring a transaction pool by a miner is the ability to generate additional income by changing the order of transactions. For example, someone wants to find an opportunity to engage in cryptocurrency arbitrage. Someone wants to get to the NFT sale before other users get there, in other words, to carry out front running. The same actions can be taken in relation to any decentralized exchange, so that, having snatched someone’s transaction, have time to repurchase the tokens, and then increase their value for a more profitable sale. In addition, pool monitoring allows the miner to automatically withdraw money from their wallet immediately after entering it. Thus, we can conclude that, by providing himself with the ability to monitor the transaction pool, any miner can be able to form profitable cases and extract Miner Extractable Value.
