HFT on DEX: Finding Opportunities in the Decentralized Landscape! 🌐🔎
By July 2025, high-frequency trading is not limited to centralized exchanges; it is increasingly penetrating decentralized exchanges (DEX). However, its nature here is somewhat different:
MEV (Miner/Maximal Extractable Value): On DEX, HFT is often associated with extracting maximum value from blocks (MEV), where bots try to outpace user transactions to profit from arbitrage or liquidations.
Gas wars: HFT bots may offer higher gas fees to have their transactions included in a block faster than others.
Privacy challenges: The transparency of the blockchain means that HFT bots can "see" pending transactions. DEX developers are actively seeking solutions to minimize the negative impact of HFT/MEV, such as "private pools" of transactions and more complex gas pricing mechanisms.
