The vast majority of the TX on Celo’s network are already bots, not humans. The ratio is like 20:1 or higher already.
There are 2 types of bot activity on Celo today:
- top of block priority gas bidding, there’s 3 or 4 players bidding on these, their bidding gasPrice is capped by the available arbitrage profit left over from the previous block
- backrunning bots listening to mempool and tailing human trades that cause unbalanced pairs
Over the last 6 months, there’s been a shift towards more of type2 bots vs type1 bots. They issue way more TX into the network than type1, but cumulative gas fee is actually drastically less because type2 backrunners do not bid up the gas price to insane levels. They are always submitting TX at the exact same gas price as the human trade.
Digging a bit deeper into what’s happening between competitive type2 bots, it’s converging to a winner take most dynamic where there’s one set of bots that have the fastest reaction time and accuracy, and is able to extract the bulk of the profits with just a few TX.
Other slower backrunners are not capturing profit and are just wasting gas.
Example block from yesterday https://explorer.celo.org/block/12569894/transactions has a $5k trade triggered 14 backrunner TX. Block was stuffed 2/3 full.
Swappa bots SwapExactInputForOutputWithPrecheck and 0xb24e6ae6 captured all of the profit, resulting in no profit for type1 priority gas auction bots in the next block.
Pro this means gas bidding on Celo will be kept to a minimal because the amount of profit to be extracted at top of block is minimal
Con you have at least a 10x+ ratio between human TX and backrunning TX, this is what’s eating most of the block space
My guess at how the block congestion will play out is:
- The dominant backrunning type2 bots will keep innovating on efficiency and drive down the number of TXs necessary to extract the profits (extra TX still cost the bot a little bit of gas)
- This is a low latency competition at the milliseconds level, only the fastest one wins and the rest are just spamming the network for no gains, hopefully the losers realize this and leave