# Arbiter for Searchers/Solvers:

## Redefining Arbitrage with Arbiter

Currently, searchers/arbitrageurs' competition depends on the blockchain they operate. The biggest differentiator is whether a blockchain supports Flashbots ' building process. However, in both cases, the biggest beneficiaries of MEV are validators(miners).

Arbiter V4 DEX hook modifies UniswapV4 and PancakeSwapV4 pools to redirect significant parts of MEV from validators to Searchers/ARbitraguers and Liquidity Providers.

## Auction Types for Searchers in Arbiter Protocol

Searchers in the Arbiter Protocol engage in competitive auctions to secure special access to specific liquidity pools. By winning these auctions, searchers can enhance their opportunities for profit maximization by leveraging the unique right:

- to control the pool's swap fee by providing a function (Smart cotnract) that sets a fee based on the swap input parameters and allows the holder to collect X% (5%) of fees as a reward. Introducing this role creates a profit-driven competition for solving **Optimal Fee Problem**. The fees are bounded by minimal and maximal values.

- Controlling the fee allows the holder to perform swaps without fee. This creates new arbitrage opportunities and gives an upper hand over competitors.

## Auction Dynamics and Ownership Transitions

The Arbiter Protocol features a **continuous auction system** based on Harberger Lease, where the right to controll and collect fees can be transferred at any time through overbidding. The winner of the auction **pays rent continuously**, with payments deducted from their deposit. (After winning an auction a privilege is granted from the next block).

## Bidding Process

The auction system allows users to participate by depositing rent currency tokens into the contract. Once the deposit is made, users can place bids to gain special access to the pool by offering a rent payment. To place a bid, the following requirements must be met:

- **Minimum Rent Time:** The bid must specify a rentEndBlock at least MINIMUM_RENT_TIME_IN_BLOCKS blocks in the future.
- **Overbidding Factor:** The new bid must exceed the current rentPerBlock by at least RENT_FACTOR (e.g., 5%) unless the rent ends within TRANSITION_BLOCKS.
- **Deposit Requirement:** The bidder must have enough deposit to cover the rent (rentPerBlock * (rentEndBlock - currentBlock)).

### !! We're looking for searchers feedback & are open to collaborate !!

## Find More

https://arbiter.finance/pitchdeck/ - pitch deck
https://arbiter-1.gitbook.io/ - arbiter general docs
https://hackmd.io/@arbiter/HyEAkkTfJg - technical docs (WIP)

https://hackmd.io/@arbiter/S1mYi16M1l - one-pager for Investors
https://hackmd.io/@arbiter/HyqTeyafyl - one-pager for Liquidity Providers