Summary

Create a tool for arbitrage capture during minipool exits and rETH burns.

Required Milestones

Milestone A - Arbitrage Capture Tool

Payout: $9,000 (additional $1,000 bonus for exceptional features and UX)

Functionality

  1. The tool must bundle the following actions for arbitrage capture:
    • Scenario 1: Given rETH and an exited minipool, bundle a distribute and an rETH burn to achieve the full protocol price for rETH using the ETH distributed from the minipool exit.
    • Scenario 2: Given an exited minipool, bundle a flashloan for rETH, a distribute, and an rETH burn to achieve the full protocol price for rETH, and use the ETH to repay the flashloan, leaving profit ETH.
  2. The tool must include basic guidance on:
    • The two forms of closing arbitrage:
      • Pre-purchasing rETH to lock in profits.
      • Avoiding capital requirements but accepting the risk of a closing discount during the exit period.
    • (Stretch Goal) Estimating exit times for a user’s validator.
  3. The tool should allow flexible implementation methods, such as:
    • The tool can be implemented as desired by the implementer (eg using existing multicall contracts).
    • The tool should avoid restricting users (eg requiring a Safe withdrawal address).

Documentation

  • Thorough documentation should be delivered describing usage and guidance on arbitrage scenarios.
  • Delivered documentation should cater primarily to less-technical users to encourage adoption of the tool.

Milestone B - Advanced User Experience (Optional)

Maximum Payout: $1,000 bonus

Additional Features

  • Include a user-friendly UX for bundling actions.
  • Provide advanced guidance, such as identifying optimal validators to exit or calculating profitability in various scenarios.
  • Address usability concerns to ensure a seamless experience for diverse users.

Further Notes

The previous bounty (BA022310) faced two challenges:

  1. Insufficient incentives, with rewards depreciating significantly over time.
  2. The requirement for Smartnode addon integration, which posed an additional barrier for contributors unfamiliar with the Smartnode stack.

This bounty aims to alleviate these issues by offering a more versatile and rewarding framework, focusing on standalone functionality with optional Smartnode integration in the future.

Verification

  • Implementation will be scrutinized for security to ensure no vulnerabilities or attack vectors are introduced.
  • The GMC development subcommittee and/or Valdorff will verify that submissions meet the requirements of Milestone A and optionally Milestone B.
  • Bounty hunters should coordinate with the GMC Administrator for submission review.

Resources

Contacts

GMC Administrator - ShfRyn
Support - Valdorff