The Arbitrage Bot Arms Race: What We Learned Running FlashArb in Production

Source: Dev.to

Let me tell you something nobody else will

Running a profitable arbitrage bot in 2025 is like playing chess against a thousand grandmasters who all move simultaneously.

I’ve been running a production arbitrage‑trading platform for over a year now. It executes profitable trades across multiple DEXs using flash loans, and I’ve learned some brutal lessons that the YouTube “passive‑income” crowd conveniently forgets to mention.

This isn’t theory. This is what actually happens when your code meets mainnet.

What Flash‑Loan Arbitrage Actually Is (For The Uninitiated)

1. Simple example – On Uniswap, 1 ETH = $3,000. On SushiSwap, you can sell that same 1 ETH for $3,010. Free money, right?
2. The problem – You need ETH to buy ETH. Classic chicken‑and‑egg.
3. The solution – Flash loans let you borrow massive amounts of crypto (we’re talking millions) with zero collateral, as long as you pay it back in the same transaction. If you can’t, the whole transaction reverts as if it never happened.

Typical flow

• Borrow 1,000 ETH (flash loan)
• Buy cheap on DEX A
• Sell high on DEX B
• Repay the loan + fees
• Keep the profit

Sounds easy. It’s not.

The Three Lies They Tell You About Arbitrage Bots

Lie #1 – “Opportunities Are Everywhere”

Reality: In our first month we scanned 2.4 M potential arbitrage opportunities. How many were actually profitable after gas fees?

Success rate: 0.006 %. The rest were eaten by:

• Gas fees (the big killer)
• Slippage (prices move while your tx is pending)
• MEV bots that front‑run your transaction
• Failed transactions that still cost you gas

Opportunities exist, but they disappear faster than you can blink—milliseconds, not minutes.

Lie #2 – “It’s Risk‑Free”

Lie #3 – “Just Copy Someone’s GitHub Code”

We’ve reviewed 50+ open‑source arbitrage bots on GitHub. Here’s what we found:

The bots that actually make money? Nobody’s open‑sourcing those.

What Actually Works: A Production‑Ready Stack

After a year of pain, here’s what FlashArb looks like in production.

1. Multi‑DEX Monitoring at Scale

We monitor price differences across:

• Uniswap V2/V3
• SushiSwap
• Balancer
• Curve
• PancakeSwap (BSC)

Key: We don’t query DEXs directly. We run our own archive nodes and index everything locally. Querying public APIs is too slow—by the time you get the data, the opportunity is gone.

// Simplified version of our price monitoring
pub struct PriceOracle {
    pools: HashMap<PoolId, PoolInfo>,
    price_cache: Arc<Mutex<HashMap<PoolId, f64>>>,
}

impl PriceOracle {
    pub async fn find_arbitrage(&self) -> Vec<ArbOpportunity> {
        let mut opportunities = Vec::new();

        // Check all pool pairs in parallel
        for (pool_a, pool_b) in self.get_pool_pairs() {
            if let Some(arb) = self.calculate_profit(pool_a, pool_b).await {
                if arb.profit_after_gas() > MIN_PROFIT_THRESHOLD {
                    opportunities.push(arb);
                }
            }
        }

        opportunities
    }
}

2. Gas Optimization Is Everything

How we achieve it

• Custom Solidity contracts hand‑optimized to the bytecode level
• Batch multiple swaps in a single transaction
• Smart gas‑price prediction (we don’t blindly use “fast” gas)

3. The MEV Protection Problem

Even if you find a profitable opportunity, someone can copy your transaction and front‑run you. This is MEV (Maximal Extractable Value), and it’s a nightmare.

Partial solution

• Use private mempools (Flashbots, Eden Network)
• Submit bundles directly to validators
• Occasionally accept loss and use the public mempool when necessary

Even with these protections we still get front‑run ≈15 % of the time. It’s now just part of the game.

The Real Numbers (Things Get Ugly)

That’s about $8,213 / month—which sounds great until you realize:

• Two engineers maintain this full‑time
• The code breaks every time a DEX updates its contracts
• One bug can drain your wallet in seconds
• You’re competing against teams with far more resources

The Arms Race Never Ends

What kills most arbitrage bots? Complacency. The strategy that works today won’t work tomorrow.

• More bots enter the market → Your edge gets arbitraged away
• DEXs upgrade their routing → Opportunities that existed yesterday vanish
• Gas prices fluctuate → What was profitable a week ago may now be a loss

If you want to stay in the game, you must treat arbitrage as a continuous engineering problem, not a set‑and‑forget script.

• Prices fluctuate wildly – Your profitable threshold shifts daily
• MEV strategies evolve – The frontrunners get smarter

We update FlashArb’s strategies every 2–3 weeks. If you’re not constantly adapting, you’re dead.

Should You Build an Arbitrage Bot?

Honest answer: Probably not.

If you’re thinking “I’ll just spin up a bot and make passive income,” you’ll lose money. The YouTube tutorials and Medium articles make it sound easy. It’s not.

You should build one if:

• You want to learn how DeFi actually works at a deep level.
• You have capital to burn on education (gas fees are expensive lessons).
• You’re comfortable with Rust/Solidity and async programming.
• You can dedicate serious time to monitoring and maintenance.
• You understand you’re competing against well‑funded teams.

You shouldn’t build one if:

• You think it’s “passive income” (lol).
• You don’t have at least $5 k to lose on gas