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# System prepended metadata

title: Arbiter for Investors

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# Arbiter for Investors

Arbiter addresses the $600 million annual MEV leakage from DeFi protocols, mostly captured by validators. Through a protocol-centric approach, the Arbiter auctions access to Protocol Extractable Value (PEV) without impacting regular users. The auction proceeds are then redistributed to the protocol shifting MEV flows from validators to liquidity providers.

The initial focus is to solve this problem within UniswapV4 and PancakeSwapV4.

## Challenges in Liquidity Provision to AMMs

One of the biggest challenges for Liquidity Providers in DeFi is **Loss Versus Rebalancing**. As prices shift, arbitrageurs exploit discrepancies between AMM and market prices, capturing value that comes at the expense of LPs (PEV), making it difficult for many LPs to generate passive income from their holdings.

Arbiter hook for UniswapV4 and PancakeSwapV4 directly addresses this issue by auctioning the privileged access to the PEV and redistributing the proceeds to LPs and at the same time targets a **Optimal Fee Problem**.

## Arbiter's Auction Hook

Arbiter uses Harberger Lease Auctions to rent two privileged roles within a V4 pool:

- **Fee Manager**  is a sole role that allows the holder to provide a function 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**. 
- **Pool Searcher**  is a sole role that allows the holder to perform swaps without fee. This partially solves the LVR as an insignificant part of extracted arbitrage (PEV) is redistributed in the form of auction proceeds. Moreover, zero fees create new arbitrage opportunities that generate additional income for the searcher and LPs.

## Revenue Generation

Simple and straightforward - 5-10% fee on auction proceeds.


## Go To Market

The goal is to onboard Liquidity Providers (professional and retail) and Searchers.
- **Key Players Collaboration**
    - Partnership with PancakeSwap and Uniswap
        - (We are already in talks with PancakeSwap atm and we are counting on getting our hook supported in their official UI)
        - (We are in contact with Uniswap but we haven't got any partnership hints from them yet)
    - Partnerships with Liquidity Providers (including Market Makers) and Searchers
        - (We have already established connections with Searchers through online communication and Devcon attendance)
        - (We are in contract with a few Market Makers)
- **Social Media Engagement**
    - Targeted marketing to align Arbiter’s pool efficiency and benefits.
    - Active search for Liquidity Providers in DeFi communities.

## Roadmap

![Screenshot from 2024-11-21 20-00-45](https://hackmd.io/_uploads/rkw5m-pfye.png)


## Founders' thoughts

We believe that in 2 years DeFi MEV will be completely revolutionized and most of it will be captured by Liquidity Providers or Protocols. Any DeFi protocol that won't focus on redirecting MEV from validators to itself or itself LPs will be outperformed. We are seeing solutions being currently built that address the problem of MEV redirection like SUAVE infrastructure by flashbots or Angstrem by Sorella. However, these solutions are still being developed, add additional infrastructure layers, must be integrated by many actors, may not be compatible with all EVMs, and will need more time to gain popularity.

Our vision is to build a solution right now that is ready to work requires no or minimal effort to integrate and is compatible with all EVMs. Once that is done we plan to expand, potentially building on top of flashbots SUAVE.

## Fundraising

### Target Raise
- From $1m up to $1.6m
- Equity with TW
### Burn Rates
- Current:  $20k monthly
- After Hire: $80k-$100k monthly

### Looking for: 
- Strategic Investors: Market Makers, Searchers, LPs, Block Builders
- VCs focusing on DeFi or infrastructure
- Angels with DeFi experience


## 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/HyqTeyafyl - one-pager for Liquidity Providers
https://hackmd.io/@arbiter/Hk3Y81aMyg - one-pager for Searchers/Arbitrageurs