I Made MEV Arbitrage Bot with ChatGPT $1,452 in a Day Passive Income

0xTeD | Web3 & Solidity
18 Mar 202405:57

TLDRThe video outlines the creator's experience using ChatGPT to generate a DeFi trading bot that exploits arbitrage opportunities on the Ethereum blockchain. The bot operates through Uniswap, capitalizing on gas fee manipulation to sandwich transactions and profit from price slippage. The creator guides viewers on setting up the bot with Metamask and Remix, emphasizing that no coding experience is needed. After a day's run, the bot yielded a 35% profit, demonstrating the potential for passive income in decentralized finance.

Takeaways

  • πŸ€– The script describes the creation of a MEV (Miners Extractable Value) arbitrage bot using ChatGPT in the decentralized finance (DeFi) space.
  • πŸ” The bot automatically trades tokens on the Ethereum blockchain, leveraging liquidity pairs on platforms like Uniswap to find arbitrage opportunities for passive income.
  • πŸ“ˆ The bot operates by sniffing for pending transactions within a block and injecting its own with a higher gas fee to process first, profiting from the price slippage.
  • πŸ’‘ No coding experience is required as the trading script was entirely generated by ChatGPT.
  • πŸ”§ To get started, the user needs to install the Metamask browser extension and connect it to the Ethereum mainnet.
  • πŸ“‹ The script provides a link to the bot's source code, which is to be copied and pasted into a new Solidity file on Remix, a web 3 platform for smart contract development.
  • πŸš€ After compiling and deploying the smart contract on the blockchain, the user needs to fund the contract with Ethereum to start sniping liquidity pairs.
  • πŸ”„ The bot can be started, stopped, and the funds can be withdrawn at any time by the user through the provided smart contract interface.
  • πŸ’° The user shares their experience of earning 1.36 Ethereum in profits after running the bot for 12 hours, highlighting the potential for significant passive income.
  • πŸ“Š Profits can vary week by week, and the user has made between 2 to 8 Ethereum in some weeks, emphasizing the dynamic nature of DeFi arbitrage opportunities.

Q & A

  • What is the main purpose of the trading bot generated by ChatGPT as described in the script?

    -The main purpose of the trading bot is to take advantage of arbitrage opportunities in decentralized finance using liquidity pairs on the Ethereum blockchain, allowing users to earn passive income without manual trading.

  • How does the bot utilize the Ethereum network and Uniswap platform?

    -The bot leverages the Ethereum network to automatically trade tokens and uses the Uniswap platform for arbitrage transactions. It sniffs for pending transactions within a block and injects its own transactions with a higher gas fee to process before the pending ones, profiting from the price slippage.

  • What is the role of Metamask in this process?

    -Metamask serves as a browser extension that connects to the Ethereum mainnet, enabling users to interact with smart contracts and manage their wallet, which is essential for deploying the bot and conducting transactions.

  • What is Remix and how is it used in creating the bot?

    -Remix is a web 3 platform that allows users to develop, compile, deploy, and run smart contracts written in Solidity. In the script, it is used to write, compile, and deploy the bot's smart contract on the Ethereum blockchain.

  • How does the bot's source code get compiled and deployed?

    -The bot's source code is compiled in Remix by setting the language to Solidity and the EVM version to default, then clicking 'Compile Bot.solidity'. After compilation, the bot is deployed to the Ethereum blockchain from the 'Deploy and Run Transactions' section in Remix, using an injected provider like Metamask.

  • What are the gas fees associated with deploying the smart contract and how do they affect the transaction?

    -Gas fees are commissions paid on the Ethereum network for smart contract deployment and transactions. Higher gas fees can make the transaction process faster, increasing the chances of successfully sandwiching transactions for arbitrage.

  • How does the bot fund itself to capture liquidity pairs?

    -The bot is funded by the user who deposits a certain amount of Ethereum into the smart contract. The more Ethereum deposited, the larger the transactions the bot can sandwich and the higher the potential profit.

  • What happens when the 'Start' function is enabled on the bot?

    -Once the 'Start' function is enabled, the bot begins sniffing the mempool for different liquidity pairs to sandwich transactions and capture arbitrage opportunities, generating profits for the user.

  • How can a user withdraw their profits and the initial Ethereum deposit?

    -By clicking the 'Withdraw' button, the bot exits the liquidity pool and returns the full amount of Ethereum deposited along with the accumulated profit to the user's wallet.

  • What was the observed profit after the bot ran for a little over a day?

    -After running for just over a day, the bot generated a profit of approximately 1.72 Ethereum, which translates to a significant return on the investment.

  • How do profits fluctuate with the bot's operation?

    -Profits can vary from week to week depending on market conditions and the amount of Ethereum deposited. The bot's ability to sandwich larger transactions with higher deposits can lead to greater profits.

Outlines

00:00

πŸ€– Introduction to the DeFi Trading Bot

The speaker introduces a trading bot generated by AI that operates in the decentralized finance (DeFi) space. The bot utilizes liquidity pairs on the Ethereum blockchain to exploit arbitrage opportunities for earning passive income. It functions by automatically trading tokens and taking advantage of decentralized finance platforms like Uniswap. The bot can inject transactions with higher gas fees to be processed before others, profiting from the slippage difference. The user doesn't need any coding experience as the script was entirely generated by AI. The setup process involves installing Metamask, using Remix for smart contract development, and deploying the bot on the Ethereum mainnet.

05:01

πŸš€ Running and Monitoring the DeFi Trading Bot

The speaker explains the process of running the DeFi trading bot after deployment. This includes funding the contract with Ethereum to snipe liquidity pairs and setting the bot to start sniffing for transactions. The bot runs for 12 hours and shows a profit of 35%, demonstrating its effectiveness. The speaker plans to let it run for another period and then withdraw the profits. The bot's performance can vary, and the speaker has previously made profits ranging from 2 to 8 Ethereum over weeks. The speaker encourages viewers to ask questions and share their earnings, promoting the use of AI and web 3 tools for passive income generation.

Mindmap

Keywords

πŸ’‘MEV Arbitrage Bot

The MEV Arbitrage Bot is a trading software designed to capitalize on arbitrage opportunities within decentralized finance (DeFi) platforms. It operates by automatically trading tokens on the Ethereum blockchain, leveraging liquidity pairs to earn passive income. In the context of the video, the bot uses a strategy that involves injecting transactions with higher gas fees to outcompete others in the Ethereum network, allowing it to profit from the price difference or slippage.

πŸ’‘ChatGPT

ChatGPT is an artificial intelligence-based chatbot developed by OpenAI. It is designed to generate human-like text based on the prompts given to it. In the video, the creator used ChatGPT to generate a script for a trading bot, showcasing its potential in generating useful and creative content beyond simple conversation.

πŸ’‘Decentralized Finance (DeFi)

Decentralized Finance, or DeFi, refers to a financial system built on blockchain technology that aims to remove the need for traditional intermediaries like banks and financial institutions. DeFi platforms enable users to conduct transactions, lend, borrow, and invest in a peer-to-peer manner. In the video, the MEV Arbitrage Bot operates within DeFi platforms, such as Uniswap, to find and execute profitable trades.

πŸ’‘Uniswap

Uniswap is a decentralized exchange (DEX) built on the Ethereum blockchain that allows users to trade cryptocurrencies without the need for a centralized authority. It operates through liquidity pools, where users can provide liquidity and trade tokens directly from these pools. In the context of the video, the MEV Arbitrage Bot uses Uniswap's liquidity pairs to identify and execute trades for arbitrage.

πŸ’‘Ethereum Blockchain

The Ethereum Blockchain is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (dApps). It is the second-largest cryptocurrency platform by market capitalization and is known for its robust and active development community. In the video, the MEV Arbitrage Bot operates on the Ethereum Blockchain, utilizing its smart contract capabilities to automate trading processes.

πŸ’‘Liquidity Pairs

Liquidity pairs refer to the combination of two cryptocurrencies that are pooled together in a liquidity pool on a decentralized exchange. These pools allow users to trade one token for another without the need for a counterparty. In the video, the MEV Arbitrage Bot uses liquidity pairs on platforms like Uniswap to find arbitrage opportunities by taking advantage of price discrepancies between different tokens.

πŸ’‘Gas Fee

A gas fee is a transaction fee required to perform operations on the Ethereum network. It is paid in Ether (ETH) and compensates miners for the computational resources used to process and validate transactions. In the video, the MEV Arbitrage Bot uses higher gas fees to prioritize its transactions, allowing it to execute trades before others and capitalize on arbitrage opportunities.

πŸ’‘Slippage

Slippage is the difference between the expected price of a trade and the actual price at which it is executed. It can occur due to market volatility or delays in transaction processing. In the video, the MEV Arbitrage Bot profits from slippage by executing transactions that sandwich other pending transactions, effectively taking advantage of the price difference caused by the delay.

πŸ’‘Smart Contract

A smart contract is a self-executing contract with the terms of the agreement directly written into code. It is designed to automatically enforce, verify, and execute the obligations of a contract without the need for intermediaries. In the video, the MEV Arbitrage Bot is deployed as a smart contract on the Ethereum blockchain, which allows it to autonomously perform its trading functions.

πŸ’‘Metamask

Metamask is a digital wallet that allows users to interact with the Ethereum blockchain and manage their digital assets. It serves as a gateway to decentralized applications (dApps) and enables users to send transactions, manage tokens, and interact with smart contracts. In the video, the creator uses Metamask to fund the MEV Arbitrage Bot and manage its operations.

πŸ’‘Etherscan

Etherscan is a blockchain explorer for the Ethereum network that allows users to view and analyze transactions, contracts, and addresses. It provides detailed information about the activities on the Ethereum blockchain, including transaction histories, smart contract interactions, and token balances. In the video, Etherscan is used to verify the creation and funding of the MEV Arbitrage Bot's smart contract.

Highlights

The creator tested the potential of ChatGPT in decentralized finance.

A trading bot was generated using ChatGPT that utilizes DEFI liquidity pairs for arbitrage.

The bot operates automatically on the Ethereum blockchain without manual transactions.

It leverages decentralized finance platforms like Uniswap for arbitrage transactions.

Transactions are injected with higher gas fees to be processed before others in a block.

Profits are made from the slippage difference in transactions.

The bot can be used without any coding experience as the script was entirely generated by ChatGPT.

Instructions are provided for installing the Metamask browser extension and connecting to the Ethereum mainnet.

Remix, a web 3 platform, is used for developing, compiling, deploying, and running smart contracts in Solidity.

The source code for the bot is included in the description for users to copy and paste into Remix.

The bot file is compiled in Remix with Solidity as the language and default EVM version.

Deployment of the smart contract on the blockchain requires gas fees paid in Ethereum.

Once deployed, the smart contract can be funded with Ethereum to snipe liquidity pools.

The bot starts sniffing mint to find different liquidity pairs for sandwiching transactions.

After 12 hours, the bot showed a 35% profit in Ethereum.

The bot can be run for longer periods to accumulate more profit.

Profits can be withdrawn at any time, and the bot returns the deposited Ethereum along with the earnings.

The creator has made up to 8 Ethereum in weeks using the bot.

The video encourages viewers to share their earnings and subscribe for more passive income methods.

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