Web3 Galaxy Brain 🌌🧠

Nicholas: Welcome to Web3 Galaxy Brain. My name is Nicholas. At the end of each week, I sit down for a Friday afternoon conversation with some of the brightest people building Web3. In this episode, I'm joined by Dev Anon, ApeDev, and Jiren Z for a fascinating discussion all about NFT MEV. MEV, or Maximum Extractable Value, is the value that can be extracted from block production in excess of block rewards and transaction fees. Two of today's guests, Dev Anon and ApeDev, are a professional MEV searcher team. They observe the mempool to find arbitrage opportunities that they can act upon for profit. In this very special episode of Web3 Galaxy Brain, they reveal their techniques for NFT MEV and explain why they've decided to return to fungible MEV. Blockchain sleuth and Etherscan expert Jiren Z lends his domain expertise to deepen this exploration of the NFT MEV landscape. It's extremely rare to hear MEV operators discuss their techniques. I was especially grateful for the opportunity to speak with today's guests. I hope you enjoy the show. So Dev Anon and ApeDev have put together, well, actually, it hasn't gone live, correct? But you teased a forthcoming NFT MEV repo, right?

Devan Non: Yeah, exactly. So we haven't cleaned it up and made it ready for public consumption yet, but it's something that we'll be doing and announcing.

Nicholas: So yeah, maybe tell me a little bit about that. What does it do? And maybe even what's the whole scene that you're working in like?

Devan Non: Yeah, sure, sure. Maybe what we could start off with is a little bit of what MEV is. So MEV refers to maximal extractable value, or it's also known as minor extractable value. And essentially, it's the ability for miners of certain networks to insert transactions that they want, basically. Not anything, I mean, they can't just insert a transaction to spend a bunch of Ether that they don't have. But they could, for example, insert a transaction that says, okay, mint three of these NFTs right after minting is enabled on an NFT. So that's how, you know, if you're trying to get into an NFT mint sometimes, and by the time the page has loaded, there's no NFTs left in the public mint. That's probably why, is because people are basically using these MEV services, of which I'll explain deeper how they work.

Nicholas: The most sophisticated one I saw was, I can't remember if it was Doodles or one of them, but bundling the unpause transaction with a mint so that the searcher is, I guess, are they considered searchers if they're botting a mint?

Devan Non: Exactly, exactly. Yes.

Nicholas: So the searcher like bundles the unpause function call from the Doodles or whoever, the NFT creator, and then packages in the same transaction, never hits the mempool, the mint of the first whatever, or 10 mints of 10 each or whatever the limitation is of the contract. That's more or less how it works, right? Or that's one technique to nailing the beginning of a mint. The beginning of a mint.

Devan Non: Exactly, exactly. I mean, so there's many ways that minting kind of gets enabled or turned on. One is unpausing or kind of, you know, enabling the mint from a contract call. And that's exactly what we've seen happen a lot. And it's actually something that our bot can do. It can listen for a specific transaction in the mempool and then actually bundle it and send it along with all of our mints. And this is probably the most sophisticated and most foolproof way to do it. But sometimes, you know, NFT contracts also have just a time where they're enabled from. So in the smart contract, they'll code in that from, you know, 5pm UTC. on this date, minting can happen. And then you need to think about it a bit differently.

Nicholas: I didn't know about that kind. So stored on chain, they'll have the period of time when minting is open?

Devan Non: Exactly, exactly. Yeah. Yeah.

Nicholas: I'm really curious, just like more even socially, like what the whole scene of this part of the MEV world is like. Do you do your bots detect those dates or you're having to go like spec out projects and manually adjust the bots?

Devan Non: The reality with that is it'd be something pretty hard to automate because it sounds so simple and standard nitty gritty. But, you know, in some contracts, they'll call it something like public mint time. In other contracts, they'll call it timestamp. Just I mean, the variable name, which is just holding this, this date, basically this date and time. And you could build something that would be a bit smarter to do that. But it only takes a few minutes to go and check. If that's the case, then you just pull out that value and wait for that time to arrive. And then you send your mint transactions.

Nicholas: So basically, because of like variants in function names and things like this, it's not even worth, although I would think that some like an FPFP projects are reusing contracts that you could just get a couple of the major NFT contracts and snipe some of them. But strategically, do you think about specific projects that you're aiming for? or would your tooling work generally for if you could get over this issue? Do you think it would be EV positive to just be attacking most NFT contracts? Or do you think it's? do you try and strategically pick some specific ones?

Devan Non: With this form of MEV, right. So just to maybe be clear, some form of MEV is more where you can guarantee your return right in one transaction. So for something like an arbitrage opportunity between Uniswap and SushiSwap, you can guarantee that you're going to make some money. And, you know, and if you don't, you basically don't run the transaction. Here, we're basically taking on risk and you can be stuck with them with Crud or with, you know, just a few NFTs that you can flip, essentially, if you don't think about it. So really, we just aim for the most hyped ones. And we've worked with some people who will, you know, essentially give us some alpha on which ones are going to be hyped. And then, of course, they get a reward for that. But we want to kind of high or rather a low risk chance for the to be stuck with the NFTs and not be able to sell them, because ultimately, while a lot of people are going to say that's a pretty dirty game. I mean, this is the reality of decentralized marketplaces, right? Bots are actually at the forefront. So, yeah, essentially, we look for like larger, hyped NFT launches.

Nicholas: Right. It makes more sense. So the illiquid JPEGs, the major barrier for you is to get involved is if there will be liquidity post-drop. And I presume almost entirely the liquidity you're interested in is like right after the drop. or do you hang on to things if they're especially rare and you believe in the collection? Do you manually go through at all?

Devan Non: Yeah, you know, that's a great question, because when we started doing this and I'm not going to pretend so. So in terms of MEV, we're doing it a while. But on the NFT side, I mean, we worked on NFT projects, but didn't really know the market in terms of how you actually know when you should, let's say, sell them. But on certain launches, we've kept some. And but what's really interesting to note is, yeah, I mean, around January, because obviously a bunch of these bots running and it's a very competitive ecosystem, but you can see what the other people are doing post. Right. You can see what they did on Etherscan or any of the other explorers. What's really interesting is that everybody very quickly started upgrading their bots to just automatically list them all. And then what happens, which is pretty funny, and they would list them at maybe the floor price and then it's just other bots, other like floor bots essentially buying them up. So you basically have like a bot buying, you know, straight from the mint and then another bot sweeping the floor on the on the NFT collection. And that was kind of the next step was actually automatically going straight to the Open Sea marketplace, listing them, you know, allowing them and then listing them. And then they would be bought all very, very quickly. That would all happen in a matter of seconds.

Nicholas: That's fascinating. So in the end, the market, it was like an efficient market modularized by botting the mint and then botting the early secondary. But then you're now expanding into doing both or at least that's where some people have gone. So vertically integrating the botting through the mint and the early secondary. Is there later points at which being a botter is useful? Or I guess for sniping secondary market, there's also like the long tail of the secondary market sniping rarities that were incorrectly listed low using Open Sea API or something like that. Maybe arbitrage opportunities between like Rarible, Open Sea, maybe Zora sometimes.

Devan Non: Yeah, yeah, exactly. So, I mean, that's kind of where we got to in terms of the complexity, because frankly, it's an ever growing game. And this space, especially with some of the easier NFT collections kind of leveling off in terms of price, it's just not as profitable as, let's say, more traditional MEV can be. I think if you fully dedicate your time to this and the NFT MEV space, which again, just to be clear, it's something that Abe and I explored quite deeply, but not doing full time as opposed to our other MEV efforts, which would be more on kind of year C20 or yeah, kind of cross-decks arbitrage, let's say more standard stuff. I think you can keep going to that. But I think the most basic version of what you mentioned, Nicholas, is the floor bots, which are basically looking at all different markets and sweeping any floor to try and keep it consistent.

Nicholas: Yeah, it's interesting. I mean, all of it does. Of course, some people will look at MEV with disdain. It may be especially people who aren't able to tangle with it or don't want to have to learn about it or whatever. But it is like market efficiency to be doing this arbitrage work to like, you know, lift the floor or whatever to do the work of realizing the sort of evening the field over all of the different marketplaces. Do you find it more interesting to do the NFT work if it was more profitable, if they were equally profitable, which would you do?

Devan Non: That's a good question. That's a good question.

Nicholas: If they were equally profitable, I guess it's a silly question in a way.

Devan Non: If they're equally profitable, right? I mean, the life of an MEV searcher is to sweep up as much profit as you can. So if they were really, truly equally profitable, I mean, you just work on both. At the moment, the token, like let's say more standard MEV is a bit more profitable again. And maybe that's also because we don't know the NFT market well enough. And, you know, what we were doing was, as I said, kind of buying the more hype launches and then flipping, which is fairly standard. But what happened was the floor price would basically be equal to the mint price plus the gas required to buy it. I know it's a very simple thing to say, but you would basically see that these bots were just listing for fractions of a net of profit. Whereas when you buy 100, that's fine. Like we see in some of the more famous and bought launches. But it's a. it's a race to zero and a race to efficient market for everyone else. But yeah, as you said, they might not like it, but that's how you get an efficient market. And for searchers, it's a race to essentially negligible profit.

Nicholas: But is that not the case of all MEV?

Devan Non: It is. It is. But it's more so that I think, you know, when you're into MEV, what you want is an early opportunity. And with the NFT space, it's just become so competitive, which is, again, you know, good for the liquidity in NFTs.

Nicholas: It's good for OpenSea. is who it's good for.

Devan Non: Yeah, true, true. Or the royalties, right?

Nicholas: OpenSea is now taking, yeah, 2.5 percent off all of the 0.001 ETH higher than mint price NFTs. Shit, we fucked up. We're in the wrong part of the market. What the hell?

Devan Non: Exactly, exactly. So, I mean, that's just reality with MEV. It's always going to be race to zero. So my point with that is just the NFT space race to negligible profit very quickly.

Nicholas: Right. Hmm. NFT space race to negligible profit. Well, OK. So I was actually going to ask a slightly different question, which is like, is there a compounding effect? Do you have a few players in MEV markets, maybe specifically NFTs? But I'd be interested more broadly, like if you do vertically integrate, let's say, as much of the botting process as possible. So you integrate four teams that were addressing different parts of the pipeline of an NFT's lifecycle, at least its early lifecycle. Then if you were able to increase profitability by working together and broadening the vertical integration or, you know, increasing the vertical integration through the whole process, would you just have more ETH to deploy? And then by the end of that, just be more successful because you could do more of the like low quality projects at a fraction above mint price. So you just keep compounding like that? Or yeah. Does MEV work like that?

Ape Dev: I think related to the sort of previous questions which were asked, one of the main things that sort of struck me was in NFT MEV versus kind of ERC20 traditional MEV, there's this distinction between kind of competitiveness and adversarialness. So with minting NFTs, there's a lot of competition. So you may find it very difficult to get your mints in even when you have an MEV bot. It may be that you chose the wrong gas price or that your bot just didn't account for a sort of simple edge case, which led to you not getting the mint. So the kind of danger there is that you kind of don't get the mint and you waste a lot of money on gas. And, you know, that's unfortunate and it's sad, but like you're not getting wrecked in a big way. But when you're kind of minting and when you're trading ERC20s, you have an extremely kind of adversarial environment that you're working in. So if you're doing arbitrage or you're doing sandwiching, you have these bots which will basically try to wreck your sandwich bots by kind of looking at uncle blocks. And if there's a transaction that you've made in an uncle block and you don't have the specific mitigations against these kinds of bots, they're basically going to include a buy transaction that your bot made and then not the sell transaction. Oh, wow. That will then lead to your bot basically getting wrecked. So in kind of answer to your question about whether we do the NFT versus ERC20, I'm currently like much more able to sleep well thinking about like running an NFT bot overnight or something. Whereas if I was thinking about running ERC20 bots that does arbitrage or that does sandwiching, you're kind of always got to have one eye open because there's these kind of increasingly nasty variants of the original tech called Salmonella, which are kind of out there to try and steal all your ether. And then when it comes to like sort of vertical integration and integrating other teams, it's something I would definitely be very into and very open about. But it's just like Devan and I have worked together for a couple of years. So we have quite a high level of trust between us. And I think one of the big challenges there, if people want to come together in the MEV space and start kind of collaborating together, is a lot of these strategies. Basically, the lion's share of the yield that it's possible to obtain will go to the person who has the most algorithmically optimized bot. So the kind of incentive structure of any collaboration has to be very carefully designed so that one of the people collaborating can't just go and make a couple of improvements to whatever strategy is being run and then take all the profits. So, yeah. Sorry if I rambled a little bit in the first half of that, but that would kind of be my thoughts on what's been said so far.

Nicholas: No, that's brilliant. I see Flashmint. I wanted to jump in. Flashmint. And maybe you could also describe what Flashmint is at some point.

Flashmint: Yeah, I actually had a question for Devan and ApeDev. I guess I kind of wonder about the boundary between what's MEV and what's trading. So you were saying, ApeDev, that the edge ultimately goes to the person who can like shave down and optimize their code. I understand that argument for heavily liquid markets, but it seems like when you're taking liquidity risk, part of it might just be two. who's got an information edge and is more willing to take the capital risk on getting an NFT. Do you agree with that? Am I misunderstanding? Just curious for thoughts.

Ape Dev: Yeah, absolutely. I think in the kind of NFT MEV space, it often is kind of an informational thing, whereas with arbitrage, you kind of everyone has equal opportunity. So not necessarily equal opportunity, but the playing field is a lot more sort of level there. So with NFTs, we basically had a group of people kind of feeding us info on the social side about. is this a hype launch? Is the floor price likely to increase massively, etc., etc.? And there were actually a couple of instances where we got that kind of drastically wrong. So when we minted, when you take into account the gas price that we paid, which was often, you know, in the high tens of thousands, probably higher, you then had a situation where the floor price basically only just covered or even left you in somewhere where you have a loss. So I think the grounds for collaboration is probably more open in the kind of NFT MEV space, if you want to call it that, than in the sort of arbitrage one. But yeah, I'd be happy to hear Devin's thoughts on this as well.

Devan Non: Yeah, I mean, I think the main point of that that you mentioned, Flashmint, is exactly the difference is the capital risk, because you can be stuck with these assets as opposed to, again, more traditional ERC20 MEV, where you're effectively have no kind of liquidity risks. You know, you maybe just keep ETH and you can basically trade everything there. Whereas with the NFT space, you can hold on to a lot of these NFTs. We have wallets with a lot of NFTs, let's be honest, that haven't made us money. Thankfully, that's the more rare side, because we had really good alpha coming to us. But that's the reality. And you're left with NFTs that you spent thousands of gas on trying to get that you actually can shift. And if you're treating it purely like an investment the way we were, that's not what you want.

Flashmint: Sorry to keep asking questions. So, Nicholas, feel free to cut me off. I'm curious, you know, you then it seems like become pretty dependent on the alpha. The alpha is like this is going to sell out or not. And if it is, then you kind of just want to be first and you can win because you have better tooling. Do you ever have to go a click deeper into that? You're getting alpha from somebody who's saying it like, is there like a trust but verify kind of thing? Or what does that like second look look like? Or is it just you get a temperature read and then and then feel it out from there?

Devan Non: I would think there it's, you know, we are in the space a long time. We would know if something looked fishy, but also we were really, you know, with close colleagues that were actually doing this. So and of course, we had a incentive for them. Right. I mean, what they would get if it didn't work out is nothing. And if we would lose some money spent on it. And but if it worked out, then we would always have a win win kind of cooperation with them. So I think it was in their best interest to service that alpha in our specific scenario. But go ahead, Jordan.

Jiran: For the teams that I work with is usually watching secondary as well. Right. So like this pre-mint stuff where people do pre-mint first and then public mint after the little hint of alpha would be the better way to do. it would be public. But what we do is we watch the pre-mint secondary. And if it's pretty strong, if you can get to the mint first and quickly list them like immediately, you can try and offload that way and then use a little bit of that early secondary to like build into like an unrevealed FOMO hype. At least a lot of this year's been a lot of that stuff.

Nicholas: So wait, so there's. I'm trying to think of the whole pipeline. So there's Discord botting and maybe Twitter farming, but it's mostly like Discord allow list slash whitelist access. Right. So that is how you bought the pre-mint. Then you are watching the pre-mint to bought the public mint and then you're botting the early secondary. And then what? then? maybe there's also like an intermediate bot there that's helping you to analyze rarity to decide what to liquidate first and what to maybe hang on to to see if it develops.

Jiran: Yeah, well, so we skip. I mean, everyone's different, but like my team would skip the pre-mint because just the Discord Twitter bot thing is just a headache. But what we do is like on a really hype drop, the pre-reveal will like mad FOMO. Right. So like there'll be massive FOMO ramps where a lot of the pre-mints gone. A lot of public assumes that they're just going to lose the public mint anyways. And then it's just a highly competitive public that's left. But there's some where it's like you can capture, let's say the whitelist has happened. Right. So the early pitchers have gotten in. There's a little bit of FOMO. So now the floor is 3 ETH. But the mint for public is still like 0.1. Right. So it actually helps a ton to do that because then you can just kind of calculate how much gas you're willing to risk to try a mint and still come out like at least with the 2 or 3 X. I mean, at least that's what the play has been this year because the just the competition has gotten so much more different based on last year's thing. So, yeah, you just kind of use the like you use the whitelist mints to calculate what the public may look like. And then if it's worth it, then you jump in. Right. Because like what ApeDev and DevMobile were saying is like it's just so much more risky now of like one, you end up with like worthless NFTs or two, you just like overpaying gas and then can barely get your money back.

Devan Non: Yeah. Yeah. 100 percent. 100 percent. I mean, this is where we saw the bots get, you know, a lot of the bots smarter, as I said a few months ago, and at least at least more of them, which was instantly listing at what was, you know, a small profit. And that was a big game changer because for a long time you could just look at kind of that whitelist price and know, OK, this range of gas values, the way we always did it was had a range of gas values that we were willing to spend and we would basically try with many of them. so that, you know, obviously if we got in with some of the lower gas values, it was even more profit. But yeah, after you take into account the kind of royalties plus the gas cost, what we found was basically that price, whatever those values are added up plus the mint cost, essentially on the on the smaller launches would become the floor price very quickly because it was bots just doing the maths and taking those smaller pieces. So, yeah, what you said is so true on the bigger ones, but on the smaller ones, especially now you just see them get flipped instantly and the new floor price becomes essentially that kind of computed floor price that all the bots have basically calculated is what they need for a profit.

Jiran: And it's interesting, like this year I've seen like whoever gets to list first, like probably wins, right? Like just like there's even competition on who lists first because it would like immediately go from like point eight to point two. So like if you can get up up ahead like right away. So there's a whole competition on just listing now.

Nicholas: Did you say, Devanon, that you were? how did you say that you were saving gas by spamming multiple transactions, did you say?

Devan Non: Yeah, I mean, so there's many ways you can do it. But the more simple way is let's say you have an NFT launch that limited to three mints and let's say they did that correctly. Unlike, you know, some examples that I've actually got with me today where you could use a contract and mint hundreds. We've all heard about those. So let's assume it's a mint that has a limit, you know, and coded incorrectly to check for a contract. And then we would try with many accounts at different gas prices. Of course, ones that we've already kind of worked out would make sense. So we'd maybe have 10 accounts and start at like a thousand guay and go up to 10,000 guay or something like that.

Nicholas: But when you say go up, if you don't nail the Flashbot mint, you'll someone else will, right?

Devan Non: Yeah. I mean, so I think it's super important to say is we would always broadcast our transactions. This is I don't think it's crazy, Alfa, but you should broadcast your transactions to basically wherever we'll listen to them. So that includes the actual Flashbot or PCs. But also we would just send them on the normal mint pool. And because you might you might be lucky sometimes and get those in and then they can be cheaper and lower complexity. The Flashbots mints work really well when the NFT allows you to mint like hundreds at a time. True, maybe a contract.

Nicholas: Oh, interesting. So you're sending these transactions to both the mint pool and to Flashbots with like the same nonce?

Devan Non: Exactly. That's the important part. Yes. Yeah.

Nicholas: I love that nonce hacking. So it's so fun.

Devan Non: Actually, you know, when or slash if we open source this, depending on if NFT season comes around again. I don't know about some people, but no, I think we will. You'll see exactly how that works. So, you know, you got to pre-compute the nonce up front so you don't get wrecked.

Nicholas: Someone was asking how to. they wanted to set a trap in a contract. I don't know if there's maybe language around this, but to encourage MEV bots to. I think it was divvy up a split in a splits contract, something like that. How do you incentivize bots sufficiently that they'll do the transaction work like a cron job for you? As someone suggested, well, you can just broadcast if the transaction is profitable to make them aware of it. You just broadcast it to the mempool and then someone else will pick it up if it'll be EV positive. But the sort of problem was that the transaction will be. you'll end up paying the gas for your failed, your reverted transaction just to inform the bots that it was happening. So my suggestion was to just reuse the nonce in whatever your next transaction is so that it'll be replaced. But it's fun. This nonce hacking stuff. This is cool. I should take a look closer. look at MEV stuff.

Devan Non: Yeah. Yeah. I think that's a pretty smart way to do it, actually, with the nonce and then spend it later on, send it in with a super low gas price. So it's in the mempool. Yeah, I like that for a cron job.

Nicholas: Would a MEV bot ignore sub 10 guay or something? or is there a cut off? or it's probably no one's even thought to ignore low guay transactions or low gas transactions?

Devan Non: To be honest, I haven't. because I mean, if someone is, let's say, kind of stupid enough to send in something that's going to extract a lot of value with a super low gas price, that's one of the easiest things ever to front run. So I wouldn't I wouldn't count them out. We're not at a stage yet where the mempool is too big to ignore those.

Nicholas: Right.

Ape Dev: Yeah. I'm fairly sure the generalized front runners, which will pick up that kind of thing. I mean, there are generalized front runners which will pick up high gas transactions and then use a higher gas price if it's going to make the money. They basically just try the same input bytecode to a given contract. So, yeah, I would assume that that would work fine.

Flashmint: Something that I've been noticing about the space recently is that as kind of secondary marketplaces become more sophisticated, there are new, maybe more expressive ways to put out bids and asks. And I guess I wonder if that's impacted your guys's behavior at all. For example, I imagine initially some ARBs were like item to item, but I've seen more platforms that have things like floor bids or floor asks. And I'm curious if that's impacted your guys's work or observations at all.

Devan Non: Yeah, I mean, I don't know if it has for for Jaren, but it's not something myself and April are looking at right now. Maybe we should. So I don't know, Jaren, if you have any thoughts on that.

Jiran: Sorry, I was literally in the middle of a mint. Can you repeat the question?

Flashmint: Oh, don't worry about it. I just leaked some alpha in the spaces, Jaren. It's over.

Nicholas: Oh, shit.

Jiran: Well, it's game over now.

Nicholas: Jacob, can you explain a little bit what you mean by this new tech?

Flashmint: Well, I guess, you know, when people specify, you know, oh, I would pay this much for this NFT, maybe we're used to bots putting out floor bids, which we I think interpret to mean they go put out a bid on like every single item in the collection at some price, which is, you know, actually whatever it is, 10,000 bids, not one bid. But I've seen some platforms come along. I could be making this up. Somebody call me on it if I'm not right. Some platforms pop up where you can specify a bid, one bid at the floor where you say I'll pay one for any of these, you know, just fill it and we're good. And so I was curious if that has impacted the landscape at all. I guess the concrete example would be, you know, it's easier to fill floor bids and turn mints into arbitrage rather than having to hold the capital yourself.

Nicholas: Right.

Jiran: So there was a couple back in the day. I haven't seen in a while. The Dr. Burry guy. And then there was one that was hilariously called like cool cat vet or shelter or something like that. And there's been a couple like I know Paradigm's research seeing them, but there's some people who do open sea market making, essentially. So what you're talking about is they'll find floors that are pretty active, like collections that are pretty active and they'll bid just like slightly below floor and then immediately sell at floor just slightly above floor. So it's just like really tiny bit of that's less. I mean, just more just like market making on a inefficient market.

Flashmint: To that point, something I'm very curious about is, you know, we've talked about how the markets for entities are less liquid than, say, you know, for your C20s. But it feels like they also don't secure so much value. on the whole, you know, whatever 10,000 entities at point one is, you know, whatever, 100. Like, are these markets manipulatable? Like, are these small enough that you can move the market and take advantage of that in some way? or or.

Jiran: Sorry. Sorry, I was making a joke. There's a specific guy in the space who does do quite a bit of manipulation of the floors through like very specific tactics.

Nicholas: Basically, what we're talking about is like if you were to sweep, that becomes information that others unaware of your intent to manipulate the floor. I mean, but all actors are intending to manipulate the floor. That's called back. Right.

Jiran: Well, so like something you'll see a lot of a certain and I don't know if Devon has watched this, too, but some certain teams will, like a collector or like some of the others, they'll have this thing where they mint on across a bunch of a non wallet and then sell to themselves at high prices. Right. And then what happens is then other people are, whether they're bots or real people, are then formal bidding half of what that person paid for without like doing the math that that actually makes sense or not. If you go look at killer girlfriends, you'll see it happen where like mysteriously a well-known account that's like heavily followed is buying a bunch at high prices on revealed and then sells them for these bids. And it looks like he's selling for losses, but that's not actually what's happening. If you take the transaction.

Devan Non: Yeah, I mean, I mean, this is also happening previously, right before NFTs with art. I mean, I think the big difference here is that you can do that scale and you can do it with code. You don't need to sit down. You don't need to go to an auction house. Go ahead.

Jiran: No, I'm sorry. One hundred percent. It's just it's part of the game. What can you do?

Devan Non: It's just that more scale. Right. And I think the nice thing is that it's a bit more transparent. I mean, still, they can make it opaque or, you know, try and try and make it more opaque. But yeah, it's just kind of the equivalent of trying to fuzz some numbers. You can follow the follow the trail.

Jiran: Right. And it's just it takes a little bit of thinking. Right. It's like, OK, this guy's named Mav something. And he's randomly buying from a wallet that was just funded from an exchange, has done no no other thing except mint something that was highly competitive and somehow won the mint. And it's now selling it for a high price. It's probably this guy's own wallet. Right. So like using things like that would help you kind of trace that down.

Nicholas: It does take a lot of research. I was always surprised that like Nansen and other things like this, I haven't yet seen. I saw actually Moody's DAO who are doing analysis of juice box projects to determine if they're safe to contribute to or not. They had some kind of graph visualization of funding between multiple wallets to sort of figure out who the multi-sig was for the juice box project they were evaluating. And I don't feel like Nansen or any of these other tools I haven't seen have given me like a quick way to you know, you'd have to go track down who did they buy it from? Where were they funded from? These like ether scan questions. Do you guys have any automated tools for doing that kind of thing?

Devan Non: I just want to say quickly, I love Nansen. But if you also don't know how to couple it with something like ether scan, you can just be fooled by, you know, this this large collector that you follow is buying these NFTs. And if you're not into it, you're going to just follow and copy trade and you're going to get wrecked. So I think, you know, basic explorer know-how or basic explorer foo is going to be so important. And for everyone, you know, devs and not devs, I think it's something you need to be able to do. So I don't I don't really have an answer, but I just have a comment that, yeah, that's a space that would really make use of some some more impressive tools for that.

Jiran: Here's a question for you. Do you know what smart money means? Because I still don't know what smart money means.

Devan Non: I think it's a great way to, you know, if you get out of that list, it's a great way to pump any any coin.

Nicholas: Maybe that's what the twenty five hundred dollar plan does.

Devan Non: Oh, exactly.

Nicholas: That might actually might actually be worth it. Actually, definitely is worth it if that's what it is.

Jiran: I was going to say it's a really good point. And I say it's lies. Like, don't rely on nonsense. And like I worry about all these tools coming out where it's like slowly just start like getting complacent, relying on data without like verifying.

Flashmint: So the hack, just to be clear, you're saying that basically the mechanism that people use to manipulate other people's perception of price is to buy something up, watch traded at a high price and then list it for less than they watch traded at to make it seem like it's a bargain.

Jiran: Sure. Or they won't even list it. Right. People if it's like a high, high FOMO, just go watch Kill the Girlfriends is the best one to watch on this. And then you'll see people FOMO bid half of whatever that person paid and the person will wait a day or two and then accept the bid. And it looks like they lost money, but it's like they didn't actually lose money.

Flashmint: It is interesting to think about, you know, one day when some of these NFT AMMs come around, somebody doing some crazy kind of sandwich trading on one of those feels like maybe the like a primitive analog to what might eventually be that.

Jiran: I wonder if sandwiching would happen because the liquidity just is kind of tough.

Flashmint: Yeah, this would be, I guess, a hypothetical world where there's AMMs.

Jiran: Well, PseudoSwap is working on one. So I would definitely check that out if you're curious.

Flashmint: Oh, I'm curious.

Nicholas: So are all the MEV devs hanging out in like their own private discords? Or I guess the Flashbots discord is maybe some place where people cross paths.

Devan Non: Yeah, I mean, so personally, I kind of keep to a pretty tight circle, mainly because there's so much alpha in this space. And actually, it's so hard to filter the noise. I don't want to say that the good MEV devs, you know, send out noise. But there is also a lot of psyops involved. I'm aware of some Twitter groups. I'm aware of some Telegram groups. I know the Flashbots discord got raided when there was all the Flashbots memes and MEV memes. Yeah, I mean, I don't have a concrete answer on that. If there's some cool groups, I'm not in them. I think you might know more about that.

Ape Dev: I mean, I'm in a couple of discord servers, but I don't think it's anything particularly exclusive. I don't think there's like tons of alpha in them. It's mostly just shitposting, I think. Or, you know, if there if there do exist really exclusive ones, I haven't made it into the kind of upper echelons yet. So, yeah, who knows?

Devan Non: Yeah, I mean, one thing I might add to that is that genuinely, if anyone was curious about this stuff, I mean, we're talking about right here publicly, this is going to be recorded. I don't know. I mean, I think that the whole space benefits, this isn't me sounding altruistic, but the whole space benefits from from people talking about this stuff. And then, you know, it goes back to the Dark Forest post that if anyone hasn't read, it's like required reading. It's the Bible of MEV. It goes back to that. And I think the more that people kind of like this space up, the more efficient the market gets, the more everyone wins, the more competitive MEV gets. But that's the fun of it. You know, it's the biggest game that exists at the moment for nerds.

Nicholas: And we got Worm Emoji. Yeah, Worm Emoji, Worm.eth. So Worm's developing context, which is like sort of Twitter timeline for transactions, let's say, for Ethereum data. How's it going? Did you have a question or something to add?

worm_emoji: Yeah, yeah. I had a question. Also, it's just cool hearing you, MEV Gods talk. Just like a huge subject of curiosity for me. I had a question, which was like, if you guys were advising some, you know, PFP projects on their launch or drop, how do you think that a project should be thinking about MEV? Because some of it is probably inevitable, especially as like services like Flashmint come online. But some of it, you know, could be stopped. I'm curious, like how much MEV should be acceptable and what are tactics projects should employ to either allow or disallow MEV?

Nicholas: No pre-mint. Make sure to broadcast your unpause to the mempool.

Flashmint: I can maybe give some thoughts because I've been thinking about whether, you know, the Flashmint opportunity, the longevity of it, basically.

Nicholas: Can you explain Flashmint a little?

Flashmint: Yeah, for people who don't know, Flashmint is a protocol that lets people buy and sell their spots on NFT presale allow lists. So there's three ways I've seen this happen. The whitelist work. Other people should let me know if they have other ones. They'll do like either an on-chain ownership check where they'll say, oh, if you own a cool cat, you can mint a cool pet and we'll go check that you own a cool cat and you try to mint. The other way is that they'll take a snapshot of people who own it at some point and then they'll just like check whether you're in that sort of Merkle tree or whatever. And then the third is like, you know, the discord grinding situation where you just go, you know, act engaged in the discord and then the mods will just ask you for your address. Flashmint lets those people sell off those spots to others by making sort of like a vault. So I could put my cool cat in a vault and say, you know what, I'm going to sit out this mint. Anybody can just pay me 0.1 E and mint with it if they want. So I don't know if maybe MevAdjacent is the right word here. It's not really Mev in the sense that timing matters. It's Mev in, I think, the way that people maybe commonly imagine Mev, which is like using computers to maybe bot or abuse or get around or work around certain systems.

Nicholas: It's kind of like an order book for mint passes, right?

Flashmint: Yes. As a matter of fact, if you really think about it or squint at it, and I promise I'll get back to your question more directly. But if you kind of squint at it, you're basically buying or selling the right to mint an NFT, the right to pay for an NFT in the future, which is effectively what a call option is. You're buying the right to be able to buy something in the future at a fixed price. So, yeah, it's basically.

worm_emoji: it's also kind of like how some stock has voting rights and some stock doesn't like Alphabet, Google, their stock trades with and without voting rights. And it's like you're trading off your like future mint rights.

Devan Non: But yes, totally.

Flashmint: As a depositor, right. You can basically just strip off some of the benefits of the asset. So the question that has come up that's been asked me a couple of times is basically like, well, what I've always brushed off as a champagne problem, which is like if Flashmint gets so popular that everybody's aware of it, then people will just start putting in measures against it. I think truthfully, if you wanted to come down like a hardo for your project, you would just ensure that nobody at any point is allowed to be minting from a bot. And that would crush the Flashmint use case. But it wouldn't necessarily help with some of the relayers, like I imagine, or the bots that say Devanon and ApeDev and Jiron are running. But other than that, I think checking for TX origin and checking whether something's a contract will get rid of many things until you force people to like run a utility, a relayer, or until you somehow enable like account abstraction for Ethereum accounts, which I think is pretty far away away.

worm_emoji: I guess my real question is just like, how should NFT projects collaborate with MEV? That's like the most exciting way I could put it.

Devan Non: I think that's an interesting way to view it. Yeah. Look at it as a collaboration, right, rather than adversarial. I mean, because ultimately I think what it does lead to is, you know, what we try to lead to is a more efficient market where we make money and things can, you know, you grease the wheel a bit more. But have you talked about it and actually collaborating? I mean, I think a lot of the measures that go into, let's say, this anti-bot, which I hate that term because we're talking about a perfectly distributed, decentralized computer. The one that I think actually can kind of hurt the most is the signature in the NFT mint. I don't know how much you guys have seen that. There's some larger ones that have done it where you actually require, you know, someone to go through your website and only then will you provide the signature to go along with the mint and the contract will check it. And there's also been some famous ones that haven't checked that properly. And you can mint early and all this fun stuff. But the thing with that that I will also say is, you know, honestly, sometimes we've even found that API just being on this is a bit tangential and we'll get back to like how we can collaborate. But as a fun anecdote, we found the API for getting the signature just sitting on their API backend, you know, forward slash sign, forward slash the address or something like that.

Nicholas: So for a little context for people who maybe aren't as familiar, like basically so the person minting or whatever algorithm minting will have to get a signature from a server side signing API. And you're just finding that on the web. That's great.

Jiran: Yeah, I was going to say, make sure the signatures capture. That was going to be my added thing, because you can easily find a signature and just recreate it. We're not screwed. But yeah. Yeah.

Devan Non: I mean, it needs to enter the address. But I mean, we really found APIs like many and on big ones, to be honest, that were just open. And if you did a bit of scouring and you could just pass it the address, you were going to mint from and get the signature early, which is hilarious. But my point is, I think they're all, you know, these kind of anti-bot measures are basically a cat and mouse game. And Worm, I don't I don't have a clear cut answer, but I think approaching it with how can we collaborate with MEV to, let's say, make a launch better is the right way to view it. And I'll think about it.

Jiran: I was going to add, well, one fun antidote for your flash mint is if you go look on NFTX on the cool cats, this should be a fun one for you to look at. Someone did this manually and beat me to it because I was going to make it a bundle, but essentially took their cool cat and then swapped it over and over again and claim new pets by just swapping the cool cat with another cool cat on NFTX because a bunch of people had left it in the pool. So similar to like kind of like the flash mint idea.

Flashmint: NFTX, if you're listening, hit me up.

Jiran: But my idea around it was like you kind of use options, maybe like options pricing. So you could maybe do it in a way where it's like either mint ticket or the mint itself. But if you're willing to say, have your NFT locked in a contract for a month, and you're not going to sell it, so then you get higher priority and higher chance to one mint and one maybe a cheaper price to mint than versus someone who wants to immediately mint and sell right away. So that way you're kind of incentivizing someone to hold said NFT, because otherwise the argument is just like, oh, well, bots got it before I did, even though I was going to sell it just like the bots were. And in reality, the bots are just humans who know how to code and I don't know how to code. Right. Like I really hate the bot argument where it's like you guys are going to do the same thing. You just chose not to learn how to code. And someone who knows how to code, beat you to it on something called the blockchain in which everything is run by code. So don't know what to tell you. You know, learn to code.

Nicholas: It feels like the ultimate conclusion will be that people just stop minting on interesting contracts that they've devised on their own and instead sort of group around some set of contracts that have draconian anti-bot, you know, anti-MEV measures that make them really not fun.

Jiran: If you do like options or something in a way of like incentivizing people to hold, maybe, but I don't know. I think the best way is like what Devon was saying. Like maybe there is a way to collaborate with MEV guys.

worm_emoji: Yeah. And I promise this is my last thing I'll say about this point because I know there's other things to talk about. But I guess the thing I'm just conceptually really, really interested in, if you could think about a project having two mint paths, one being like the human clicking the website and the other being a contract or MEV bot and you could design the MEV bot path to be maximally aligned with incentives. What does that path look like? And it's fine if no one has an answer, but it just feels like the future MEV that's going to be around long term has to have an answer to that. But I'll stop banging the bulb about it.

Flashmint: No, I think it's interesting. I actually was about to turn it around and ask you basically like what, if anything, do you think that NFT admins want out of, I don't know, MEV searchers or whatever? It seems like in general, my guess would be that they would prefer they didn't exist. They want long term holders who aren't explicitly financially motivated, etc., etc. So it feels a little adversarial, at least as I've thought about it.

worm_emoji: Well, if you think of MEV as a form of market making, there could be a way of community market making where MEV could seed it like a new project to larger communities. So I don't know. Again, I'll stop banging the bulb here. Just very curious.

Ape Dev: I think when you sort of see a launch of like an ERC20 and kind of ask, well, what does this ERC20 launch want from MEV bots? One of the kind of answers is kind of market making, right? So like people pay big players like Wintermute and Three Arrows, etc. to do market making, Stexas and centralized exchanges, because ultimately if prices aren't uniform, then users are kind of harmed to some extent. So maybe what NFT admins want from MEV searchers is, you know, efficient markets in terms of similar floor prices across, you know, different chains and different exchanges. If you have a cross-chain NFT project or you have a project which is launching on, you know, OpenSea, SuperR, whatever else, whatever other exchanges are out there. So that's one thing. And then the other thing I wanted to kind of mention is in terms of what can you do against MEV bots, Paradigm, who, yeah, like a really good research house, released a couple of months back a title, an article called Guide to Designing Effective NFT Launches. And that has some really good stuff in it in terms of basically how you design it to disincentivize MEV bots. And they basically said you design it as kind of a raffle and each raffle ticket has a price. And by doing that, you kind of disincentivize people who just want to speculate. So, yeah, I thought that was like an interesting take. And it struck me as kind of similar-ish to an LBP, but kind of with an NFT frame of reference.

Jiran: So here's a question around all this. And it's just been a theory of mine is like if you take away the bots, you take away the speculative nature. And I've kind of seen this happen this year is like, don't you kind of hurt the like demand and the FOMO and stuff, right? Like. it's kind of weird to talk about, but I feel like sometimes with the bots and everything else acting on it, it kind of creates this demand of like, yo, why did this mint out? Oh, my God, I got to get in. I couldn't get in. Just from a human psychology standpoint. And I wonder if it's like so fair and so kind of boring and the speculative nature's gone. Does that like end up actually hurting NFTs long term?

Flashmint: I got to say, this is what has always rubbed me the wrong way about that Paradigm article that everybody likes so much. If you could turn a hype thing that sells out in a second into a not that hype thing where only the people who are willing to pay the most got it and everybody found out exactly how much that was at second one. Would you take that is basically the question to NFT admins. And having been on the other side and built and deployed like an NFT collection before, I can tell you very certainly that we explicitly wanted it to sell out very quickly and that we are willing to take less in primary sales to make that happen. And that, you know, it makes sense unless you think you're going to like literally blow up the whole network and drag down gas or whatever, which like very, very, very few projects can do. And you probably don't realize if you're it's hard to know whether you're going to be one of them or not. It would be like telling Supreme to just make more clothing like they don't want to. They want to sell out.

worm_emoji: Yeah, I feel like I would if I was doing an NFT project and I would just want like half the supply to explicitly be to MEV bots. so it sells out and then the other half could be like to everyone else. And then maybe the MEV bots will bought that too. But I don't know.

Jiran: So you're saying we should go to public gas wars? Yes, please.

worm_emoji: Yeah. Or just, you know, just say, hey, the bots, here you go. And if not, you know, other people can take that. And then this other allocation will be harder to get. And the idea is that it'll sell out quickly. I don't know. Maybe that's like a little too callous, but it's interesting to think about these markets as being like collaborative.

Devan Non: I like that because I mean, basically, if your launch is hyped enough, you know, these people, aka us, are going to go and decompile your contract. We're going to do what's necessary if we think that flipping this mint is going to be worth it. And again, really everything except for requiring a signature in the mint is basically possible to game in some way. And even then requiring a signature, you do. I didn't mention earlier when I talked about it, but you open up to the fact that if you're super hyped, you need to have insane back end load balancing setups that you can actually provide the signatures to the people who really want to mint. And so it's a whole other kind of worms that you that you open. Excuse the pun. What I would actually say is make the mint as simple as possible, because if it's going to sell out, it's going to sell out. The work you'll put in to do anti-bot is probably not worth it. Keep it simple. Make sure it's safe and let the secondary market and the sellout actually help you in terms of creating demand and hype.

worm_emoji: Yeah, I'm imagining like one of those tokenomics pie charts. It'll be like signature mint, 75 percent, MEV mint, 20 percent, founders 5 percent.

Devan Non: I find it cool actually to explicitly just say, look, if you're quick, you can call this method and mint publicly straight away. I mean, it'll be eaten up, guaranteed, if it's a hype launch.

Jiran: I still agree with this. I feel like so many teams spend so much time on their Discord and anti-bots and stuff. It's just like, just let it mint out, let people complain and then move on and work on your project. Right. Like who cares? Like it's just. maybe I say that because I'm the bot.

Flashmint: Spoken like a, yeah, spoken like someone who runs a bot.

Jiran: But like truly, though, it's just like I see so many. Look how many of these projects have had to delay for weeks. Things are completely backed up. The hype is suddenly gone. It's all because it's like, oh, well, we didn't want our community to be mad about the bots. Well, now they're mad at you because you delayed. And then they're mad at you for this. And then they're mad. It's like, I don't know. Just try to please everyone. I don't know if it's going to win.

Nicholas: The other strategy that comes to mind for me is don't make it look hype. Like don't. I actually think longevity of NFT collections is probably largely inversely correlated with how quickly they mint out in the multiple years. Like if the price bumps too fast, then all that you have is pure speculators who have no identification with the collection who will dump at the first sign of crashing market. Whereas like, I don't know, Jaron and I sometimes look at crypto covens. I'm always trying to coven people. It's like that collection like didn't mint out for a very long time. And so it didn't have an anti-bot approach. It just didn't engender the same kind of hype. But of course, I guess a 70 million dollar payday for like four months work is probably I mean, it's not going away unless, of course, the interest goes away. Because I guess that's the other thing that if things are minting out so fast, it's such a I don't know what's invisible friends at right now. Or what are other collections that you've been looking at recently that you have observations of? What's what's gone on lately? You mentioned was it the girlfriends one?

Jiran: Oh, Killer Girlfriends.

Nicholas: Killer Girlfriends.

Jiran: I think that's my last play of the year, actually, to be honest. That was January. I haven't I really haven't seen like the cool pets one that you could have done based on certain things that I'm not going to give away.

Nicholas: What about? I was thinking about the doodles thing, obviously not an actual NFT drop, but I keep thinking that these things are going to be civil resistance things like if you're just a pure speculator, there would be no reason to wrap your doodle. So maybe people who wrap them something, something, something. I guess there is rarity in the wrapped ones as well. So maybe there is a reason to wrap them just to find out if it's worth more as a wrapped one. I'm not sure if people have been trading based on the space element. I know some people got wrecked trading them thinking they were a new NFT. I think Jaren pointed that one out.

Jiran: I honestly haven't been watching. Sorry, bro. Yeah, I remember reading something about like what they did ended up diluting the deals or something like that. But I honestly haven't been watching too much on that.

Nicholas: OK, so one idea here is that one form of collaboration would be just allowing, you know, somehow like anticipating and accepting the participation of botters in the early mint. I mean, it depends if you plan to make most of these projects, I assume are making most of their money on the secondary, even despite enormous primary sales. Maybe do you guys know the distribution better or are they all trying the same approach? Do you have different techniques depending on what kind of hype it is?

Jiran: Do you mean do some operators like hold their NFTs hoping for a secondary go up?

Nicholas: Well, I guess we were talking about that a little bit before, but like Invisible Friends seems like a certain genre of hype project. Like what was last night? The Josie Bellini one.

Jiran: Cyber Brokers.

Nicholas: Yes, I broke. Was anybody looking at that or any thoughts on that collection or any recent drop or Devon on? or do you not even look at the collection?

Devan Non: Yeah, I mean, honestly, we've been a little bit out of the game, though, the last few weeks. I'm sure there's a repo and I can tell you that the last one we we properly did some work on. But yeah, over like the last two or three weeks, we haven't been as into it. And let me pull it up in the background. But maybe we we keep talking about something else.

Nicholas: OK, I have a short question for you in the meantime, then. Are there any NFTs that you actually like? Do you have any NFTs?

Devan Non: Yes, yes, I do. Sorry. I was struggling to get back to on you quick enough when I logged in on something else. Yeah.

Nicholas: So what's your favorite NFT collection?

Devan Non: Yeah, I'm trying to think about how I can talk about this.

Nicholas: Oh, because you would reveal what you have.

Devan Non: Yeah, a little bit. I mean, not that I have anything too crazy. One that was relatively easy to buy, which has been very profitable, is the Super Gucci launch. I don't know if anyone remembers that Super Plastic Super Gucci.

Nicholas: I don't even know that one.

Devan Non: Sitting at a floor price of eight point two and volume traded is five point six K. It was pretty good, but the mint price, I don't remember the exact price. I'm trying to check it again here because we keep all of our options basically sitting there. What was the mint price? One point five and floor is eight point two right now. And you get this physical Gucci ceramic thing, which, you know, I don't care anywhere near as much about the physical part of it. But that was a pretty fun one that we actually held. because I mean, getting the floor price like when it launched went up to like 20, then it kind of popped down to around five. It's going to be eight point two. But as more of a personal thing where I think there's kind of a real big crossover with fashion and NFTs, I mean, everyone's talking about it. Very few people are actually doing it. That was worth holding.

Nicholas: So the main NFTs you have exposure to are through the collections. you've bought it basically.

Devan Non: Yes, yes. It's a little bit of a privilege to say it, but I couldn't buy it as a dev writing a bot. I don't want it, except for maybe some really older ones, you know, before this was a thing that I would have. But yeah, I mean, especially right now, it's more fun almost if I've got these from my bot. I guess it's also not so much about, you know, the quality of the product as much as, you know, the money with the ones that you want to hold. Right. Like so there is that actual kind of collector attitude to it, too. Like the ones we very much would know, I suppose, if we're going to just flip them because then, of course, we need that code in there to, you know, instantly list it at the floor price or at a price that we set because you get way more money that way. As Jiren said, it's actually very important to be the first to list. And then so what we do in our bot is basically have that flag set or not for certain collections. And one of the last that I see here that we actually didn't have it set for was the Gucci one. But since then, to be very honest, it's been NFT flipping season up until a few weeks ago where we kind of just weren't making money anymore.

Nicholas: Jiren, I know you feel the same way about bots, right?

Jiran: What are you guys doing now? Are you guys like just chilling or you looking at like like? are you guys doing anything around fractionals or LP stuff at all or like the NFT coins?

Nicholas: We have one of the fractional.art devs in the chat right now, Crypto Samurai. How's it going?

Devan Non: Yeah, I mean, on the NFT space after doing this and writing all this out and leveraging our knowledge to bring it to the NFT space, I mean, I'd say when it comes to the pure NFT market, we're probably not the most experienced people on this call. I think what we did was we looked at it from a pure, you know, code point of view. We knew that your C721 standard inside out, of course, we know solidity and EVM pretty deep. That was really our edge. But I hate to say here that when it comes to the pure NFT space, we're probably actually a little bit behind. I mean, what we do, if I can shill a bit is both Ape and I are members of Chainstride, which aims to be a genuine dev run VC. And we help out there with our portfolio companies in terms of getting ready for audits. We're not auditors either, but we've been through many, many audits in our time. We did have quote unquote real jobs up until a few months ago, also in the Web3 space. But we were making more money from MEV and other plays that it was worth going full time on it. So we have other MEV bots running. But to be very honest, they're our edge right now. And I wouldn't be able to talk too much about those ones.

Nicholas: Ape Dev or FlashMint, you want to say something? Go for it.

Flashmint: Yeah, I've since shut it down. But one of the things when I was like learning about the crypto space, tried to build a FlashBot that on top of Fractional. that wasn't really successful. But, you know, the goal is really just to like learn how the mempool works and how the FlashBot bundles work. And ultimately, there's not a huge amount of volume, I think, is what's challenging for lots of the fractionalized tokens that I've seen, where it's often like a group of people coming together around something, maybe more so than it is strictly somebody trading by selling and trading, you know, 1% of what they believe the value of an NFT is. You know, they don't always have liquid markets basically for the tokens, which for the record, I think as a product is totally cool and fine. It's an awesome way for people to come together over something. It just doesn't quite work the way, say, Uniswap does or something, you know, a typical ERC20 trading on Uniswap does.

Nicholas: If no one had any comments on that, I wanted to ask a question actually on behalf of Worm. What are like the biggest moments where an NFT MEV bot got wrecked? Are there any highlights you can recall? Is it open to any of our MEV devs here?

Flashmint: I don't know, but just saying I'm going to hop. Thanks for having me.

Nicholas: Yeah, great. Great seeing you.

Jiran: What you're saying, like a bot that did like the wrong project or something?

Nicholas: Biggest wrecked moments in NFT MEV. The biggest loss is the most embarrassing pages on Etherscan.

Jiran: I don't know, maybe whoever like bought it to Polymorphs or something, whoever got like a thousand of those is probably down bad right now.

Devan Non: Hey, I mean, look, I'll put my hands up and say that when we were writing the bot, there's a fuck ton of just failed transactions. I mean, orders of like tens of thousands of dollars. I'm not even going to joke. Thankfully, all made back and worth the knowledge. But yeah, so I mean, even we got super wrecked at the start, just investing in this space and playing the game before we were optimized and ready to compete. I think it's actually something people don't talk about, especially when you're in the pure pool space, because I know we talk a lot about MEV here and that's generally associated with flash bots, but that isn't always the best play, as I said earlier, with NFTs. And so sometimes our bot just wasn't good enough and smart enough to get in at the right time, especially at the very, very start. And I don't want to hide that. I mean, that's something that happens as part of writing a bot. You need to test in prod in this world. You can't test the scenario. I mean, we had genuine unit tests because we're we try to be good devs. But, you know, when you're unit testing against like a local network just to make sure that you pick up shit, it's completely different when you're in the production manpool. So we wrecked ourselves quite a bit, but made up for it, made up for it.

Nicholas: It's definitely like all of Ethereum and all this stuff expensive to learn. But actually, I wanted to know, have you played around with other blockchains, other EVM chains or other chains altogether? I don't know if ApeDev, you want to jump in also?

Ape Dev: Yeah. So, I mean, on the MEV side, we haven't done so much of that. We've been kind of keeping close tabs on like MEV, BOR and that kind of thing. But when I last checked, they actually had a fairly small proportion of all the validators over there on Polygon. So, yeah, it's somewhat something we'd be kind of interested in, but haven't expanded there in terms of MEV, in terms of like other strategies that we've run and sort of projects we've deployed. We've been on probably like 10 or 12 EVM chains that I could think of. So, yeah, we're quite diversified as like partners there, but in terms of MEV, lesser.

Nicholas: And you said you guys have been working for a while in Ethereum space from even before you got into MEV directly. You started just looking at the blockchain as traders or something?

Ape Dev: Yeah. I've been sort of working with Ethereum since about 2016, 2017. And Devon is similar. So we've been creating projects, tokens, etc., etc. Sometimes for employers, sometimes kind of on a freelance basis and that sort of thing in the past. So, yeah, we've had exposure to a lot of chains and some of our kind of strategies that we've run previously are kind of loosely in the sort of arbitrage space, but they're not necessarily what you would call MEV because they have components elsewhere and you're not sort of listening to the mempool to try and back run someone's transaction. It's slightly more complicated than that. So there's arbitrage and there's sniping and there's various other things we've done. So, yeah, we've had a lot of exposure to a lot of chains there. But MEV and kind of NFT sniping only on Ethereum thus far.

Nicholas: Awesome. And did you say you collect any NFTs?

Ape Dev: Myself, not a huge amount. I have a couple that I've created for friends and that sort of thing. But nothing that's kind of like, you know, top 100 in any list anywhere.

Nicholas: Only top 100 in your heart.

Ape Dev: Yeah, exactly.

Nicholas: And are you an ETH maxi?

Ape Dev: Like. I would be cautious to like, I'm an ETH maxi over like BTC maxi, sure. But I would be cautious to commit to it like completely 100 percent.

Nicholas: Let me ask this. Are you more interested in stacking ETH or stacking, let's say, USD?

Ape Dev: Oh, I'm definitely way more interested in stacking ETH over like fiat currency. Sure. I'm not one of those people who's going to go and say like, put all my eggs in one basket, let's say.

Nicholas: Got it. OK, so the blockchain is not a short term. play strictly.

Ape Dev: Oh, absolutely. Absolutely not. Like whenever I've tried to sort of like day trade. short term, it's never been as good as kind of long term holding, at least on a non-algorithmic basis. So whenever I've tried to trade like as an individual, it's always had sort of worse results on a short term basis than when I've done it algorithmically or with code.

Nicholas: Actually, have you bought ERC20 drops?

Ape Dev: Yes, absolutely. Yeah.

Nicholas: Fascinating. I didn't even think of that. I mean, I guess obviously.

Devan Non: Code is largely the same. To be honest, it's different people. I mean, actually, it's probably we're probably some of the laggards on the NFT space actually bringing over our ERC20 code bases. But yeah, the code is largely the same, just different method IDs.

Nicholas: That's fascinating.

Devan Non: I hate to call it Nicholas, but we we will need to drop off soon.

Nicholas: Thank you so much for coming. I know it's a bad time zone for you. Yeah, bad equivalency. But I got a bunch of messages during this call already saying how interesting this was. So down to talk more in the future. Thank you both for coming. ApeDev, Devin, nice to see you both here.

Devan Non: It's been a pleasure.

Ape Dev: Cheers. It's been a great time. Thank you.

Nicholas: Yeah, this is awesome. Rare opportunity to talk to elite MEV devs and crossing over into NFTs, too, which is super interesting to hear the comparison. So see you around. Maybe talk again in the future. If other people are down to keep talking.

worm_emoji: I have to run, but this was great. Thanks.

Nicholas: Yeah, sure thing. Awesome talking. Thanks for your questions.

Jiran: We can shoot this shit for like 20 minutes if you want.

Nicholas: Yeah, shoot the shit for 20 minutes. I don't know if anybody else wants to come up. Danny, I see Manny's in the crowd. We got lots of cool people. Crypto Samurai, Catherine Champagne, tons of cool people around. Karma. Yeah. So Dvar Dump wanted to ask, I feel like Jiren would be a funny person to ask this question to. Oh, God. Let me just find the question here.

Jiran: What was the question?

Nicholas: It was basically like, how do I block MEV?

Jiran: How do you block MEV? Like, just stop it completely?

Nicholas: I mean, I'm making the question sound dumb. It was it was a more informed way of posing it. But basically, like, how do I do an NFT contract that MEV botters can't get at?

Jiran: You do it in fiat with a credit card. I don't know.

Nicholas: Have you heard of Topshop? But then it's like Web2 MEV, right? Then it's just like, does the page load for you? Oh, right.

Jiran: Or it's Web2 MEV where it's like the credit card company or the larger trading firms front run you.

Nicholas: Totally. My experience of that was I heard a rumor about AGLD that there was like manipulation before it was listed, just as it was being listed on the centralized exchanges. Oh, interesting. That there was like insiders of the centralized exchanges who were making decisions prior to those announcements based on early knowledge of those announcements. I have no idea if it's true or not, but it's an interesting, possibly apocryphal rumor.

Jiran: Well, there's that old school. I do remember there was a really old school thing where there was like some API leaks on a couple of the exchanges and you could see the day before what would be listed the next day. And then you could like subtly trade that until obviously that alpha got out. So, yeah, I'm sure there's like all kinds of interesting small things like that. I was going to ask them if they're going to try and snipe Milk on Polygon with the LP thing.

Nicholas: Wait, what's this? I don't know this project.

Jiran: Milk is just the thing that Cool Cats did. Their token. I was just curious because they said they were more ERC20 like experience. I was curious if they had tried to snipe that one.

Nicholas: I had a friend once who told me that her older sister was really attracted to hackers like a black hat hackers. And I feel it stuck with me for some reason.

Jiran: Like as in like the Hollywood look or the actual hackers?

Nicholas: Actual hackers.

Jiran: Like pretty normal dudes.

Nicholas: I feel like maybe anarchists kind of like cryptography hackers.

Jiran: Yeah, so you're talking about the Hollywood looking dudes, man.

Nicholas: No, no, I don't know. I never even met the sister.

Jiran: I know all look like normal ass dudes that you would not expect to be like top hackers.

Nicholas: Oh, that's right. They're just. they look like anybody at an airport. It's just anybody.

Jiran: 100 percent. Right. Otherwise, like you're sitting at the airport. You're on your public Wi-Fi. You're on your non-SSL shit. Like someone's wire sharking you. Like do you think it's gonna be the dude with the hood up? and like is obviously like looks like a hacker or you think it's going to be someone you don't even expect?

Nicholas: I don't know. All I know is she was living in New York. And I assumed that she was actually finding people. So maybe it was just people were cosplaying. I don't know. But I feel like any researcher like this. Yeah, for sure. It's a hot new thing. Come on. It's like that's the Angelina Jolie must go out with somebody who does that. Right.

Jiran: Oh, my God. That's going to be the new Hollywood movie is a movie hackers.

Nicholas: But they're going to fuck it up. Mainstream culture is so dumb nowadays. It's not like smashing with a hammer. Adults can't understand it as an emotional expression. I'm very like pessimistic on the ability to make mainstream a meme about blockchains. I feel it's going to be so fucking stupid.

Jiran: Well, it's going to be like Zuckerberg's sister's videos.

Nicholas: That was brutal. Isn't she supposed to be a marketer? What the fuck?

Jiran: I have no idea.

Nicholas: I thought her whole thing was that she was a marketing person.

Jiran: Maybe it was technically genius because everyone hated it so much that everyone talked about it.

Flashmint: I don't know.

Nicholas: What would have been amazing if she had dropped a Wagme token on the back of it, you know, like actually extract some value.

Jiran: That would have been pretty funny.

Nicholas: Did you see the Ukraine stuff? So Ukraine said they would and will. they won't they? They won't. It seems they're going to do NFTs instead.

Jiran: Oh, right. I was, I was going to say it was like, is this the first like country airdrop rug? Well, I was, that's true.

Nicholas: It's a new scale of a UN level. So I was thinking like there, I mean, firstly, you should obviously MEV Bob Dean. It doesn't make sense.

Jiran: That's like one of those like really like morally ethically gray areas.

Nicholas: You know, spin up tornado for this one. But no, I was thinking that if they actually did it, they would be the first fiat meme coin. Like if they did the tokenomics right. Like let's just say they did a people style constitution style token. Whereas like ETH backed or some other mechanism that's like, I love the idea of an ETH backed meme coin. I think that's, I still love that. I call it ultrasound meme coin. I think it's so interesting. But if they had actually done something like that with interesting tokenomics, it would be a meme coin associated with a country. It's like a fiat meme coin. It's very interesting. And they could even like retain the control of inflation or something. And then I was thinking about like Estonia is always talking about being like a digital country or Singapore. These like small countries that can kind of mess with their laws a little bit to make weird internet.

Jiran: Like mess with their laws.

Nicholas: I don't know. It's like, I don't know. From what I have friends from Singapore and from what I understand, Singapore is not what Warren Buffett would have. you believe it is, but it would be very like E passport for Ukraine to end up having truly popular meme coin. Imagine transitioning to, it doesn't really make sense to transition to it as a, as the currency in the country, but it would be cool to see an actual country in dire need do it. I mean, not the dire need part, obviously, but to start messing with this stuff, it's crazy. It seemed unbelievable when whoever that person is tweeted that they were going to do an airdrop. It's kind of crazy.

Jiran: Yeah. I mean, I thought it was cool. Even an NFT drop is like kind of interesting.

Nicholas: I like what Devin said about how he kind of likes the NFTs better if they're ones that he's won through building bots and.

Jiran: Oh, a hundred percent. Cause the adrenaline is there. There's like an addiction to it.

Nicholas: I really wish that, I mean, I guess the truth is that the community is too small, but I wish that there were collections. I wish that there was MEV culture. Like it's by the sounds of it, people don't really communicate that much. It's adversarial generally between searchers. But to me, that's much cooler than like putting fucking Ethereum and Bitcoin logos in your collection. I really, that stuff is not really the culture to me. The culture is like what you guys end up liking because of this stuff.

Jiran: I've had this idea forever, but like a MEV NFT style drop, not that like MEV army LARP thing, but like one where it's like, you have to get creative to get the mint and like there's different rarities.

Nicholas: We were talking about this a while ago. Like if you could back run, like you'd have to be like the last transaction in the block or whatever to get the certain rarity or whatnot.

Jiran: Yeah. Or either be like top of the block, be the first to mint, be the lowest gas possible to mint. We should just do that. But yet still be like, yeah.

Nicholas: Are there any artists around? If there's an artist in the crowd, let's just do this. If you can draw SVGs.

Jiran: And we'll just do the drop.

Nicholas: Yeah, we'll do it. I mean, how long could it take? We're both kind of like, don't know what we're doing. We could do that.

Jiran: I'm literally the meme of like, is it the dog? that's like flying the plane upside down? And it's like, I have no idea what I'm doing. That's my life.

Nicholas: All right. So if there's a SVG artist in the crowd, let's do it. Let's make an MEV culture NFT drop. I mean, the thing is, it's like, it's just, they're just puzzles.

Jiran: That's why they're fun.

Nicholas: But even like all the culture, like Ethereum just has that one image. Bitcoin has like the stacks of coins or whatever. Like it's all, I used to work in Fab Labs and like digital fabrication labs. And this idea of Fab Labs, which is even itself like a kind of minor meme, but it was started by this MIT professor, but it went largely unbranded. So there were like thousands of these places all over the world pushing this like narrative that was politically expedient in the white house or whatever in the U.S. In STEM education, environment, et cetera. But it was like completely unbranded. And I feel a lot of what we're doing here is like, there's no logo for NFT. There's that one like italicized NFT thing that's made the rounds a little bit, but there's not a lot of like branding around. Even NFT, people thought it was going to be nifty for the longest time, which is, I mean, I came after, so to me it's cringe. But even like the Ethereum, what's the name of the, uh, the diamond thing? I don't know. I'm sure there's some technical fucking Tolkien name for it.

Devan Non: Yeah.

Jiran: So you're saying like there should be more branding around.

Nicholas: It's just like, there's an opportunity.

Jiran: I mean, I guess Hentai has kind of become the brand of, uh, Just like, well, and that's what's funny is all of the like MEV LARPers are like fanboys or whatever. So now the joke is like the best MEV guys are like, Oh look, there's one right here. Bevskid. I think I've talked to him a couple of times. There's a lot of big running joke of the like fanboy thing. Or my favorite is the PsyOps. the past two months, where it was like, I went to architecture school, learn how to program. And now I make eight figures. It's just like, Jesus, you tell me what you're doing. Cause I'm really curious.

Nicholas: Well, share a wallet address. How about do a little, uh, verified by ether scan, please.

Jiran: But I think it seems like anything got like sexier in the past two months.

Nicholas: It did get sexier. It did get sexier.

Jiran: It got like really like sexy and popular.

Nicholas: There's a lot of posers.

Jiran: It came from all those PsyOps where a bunch of people were like, Oh my God, you can make eight to nine figures that you did. So I thought that was kind of interesting, but.

Nicholas: There was like an influx of posers. I'm not, I don't claim to do any MEV. So just to be clear, I'm not posing at all, but.

Jiran: Yeah, we're all posers.

Nicholas: I know that Sushi was paying an anime manga style illustrator to do their custom images, but I feel like MEV people don't even have the ambition to like, you know, like you think there should be like a calling card.

Jiran: You like wreck a drop, get like a hundred of them and then leave like a little NFT in the deployers address.

Nicholas: Or just even like, like commission some ASCII porn for your, whatever your trend, your call data.

Jiran: I just like leave it. Well there, Oh, you know what? That reminds me of Blur. Blur used to do this all the time. Have you ever followed Blur?

Nicholas: What's Blur?

Jiran: So Blur isn't on Twitter. He's just like some random hacker type. I think maybe he does some MEV jobs. Not Chef Bob, not Chef Bob there a little bit, but Blur was the guy who did the Flashlone Punk buy.

Nicholas: Flash. Oh, okay. Yeah.

Jiran: Like he's the one who did the, like, I don't remember what the punk buy was. It was some crazy number. Right. And people like were losing their minds and as typical NFT community thought it was real because they've never heard of a Flashlone. And so he left like a note afterwards and it was just like something Blur, the money printer goes brr. And then he left like a 0.69 or 69 Guay transaction or something somewhere. But yeah, there are some people who are really good trolls about it.

Nicholas: For sure. For sure.

Jiran: Yeah. A calling card would be kind of funny. Yeah.

Nicholas: Calling card shirt, like the Sailor Moon, what's his name? Tuxedo masks, Rose kind of thing.

Jiran: You know, just like left in a deployer's contract. That would be pretty funny actually.

Nicholas: But the hackers, hackers that communicate by call data to this point don't think they're artists or something. Like, even though they're obviously the most elite hacker artists for this stuff. I mean, alongside the contract engineers in the first place.

Jiran: Well, it is interesting you say that you would think about like actual hackers, even they leave like little signatures and shit.

Nicholas: Right, right, right, right.

Jiran: Or even like, But like, NME people don't really do that.

Nicholas: Right. Or like the scene, torrent scene, uploaders all have like Ching Liu, the guy who made Adobe free for fucking 20 years.

Jiran: I don't remember that one, but like I know a lot of others where it's like, they just like leave. But then also the issue started becoming that it was like an ego thing and then they started getting caught because of doing stupid shit like that.

Nicholas: Oh, really? Right, right, right, right, right.

Jiran: Yeah. Like it becomes an ego thing because you have to like tell other people that you did it and then you get in trouble. So.

Nicholas: You see that guy who's like, who climbs up the Empire State Building or whatever and takes a photo of his feet. He's like made some big Sotheby's.

Jiran: Oh, the Drifter guy?

Nicholas: Yeah, yeah, yeah. That's him, Drift. There was like a New York Times article or something. Apparently it's very controversial. He goes to prison for this shit, I think is the idea.

Jiran: Yeah, yeah. So he got arrested for it, I guess. But like, so then my question has become, is he still doing this?

Devan Non: I don't know.

Nicholas: I see the photos. He's just like, yeah. So. I liked how he was talking about it, though. Personally, I'm like, don't do that. That seems dangerous. I guess if people like the photos, whatever, but it seems dangerous. I mean, do what you want to a point, I guess, unless you like fall and kill somebody or someone gets hurt trying to stop you from doing something crazy. But whatever, I guess it's all, it's all good. But he was talking about it. Like he posted like a screenshot of his text with his lawyer where he's like, like, I know you're more conservative and you know, but I'm going to do what it takes and we're going to make it through this thing. To me, I was just, I had like Travis Kalanick in my head or something. Like startup founder, like risk some kind of lawsuit, but going for it anyway.

Jiran: All right, man. I got a jet.

Nicholas: All right. It's been great talking. It's been a good episode. Short episode, only an hour and a half long. Web3 Galaxy Brain. We've had some fun here. This is a very technical conversation. I think this is the most technical episode we've ever done. So I'm pretty excited about that. Thanks for coming through, Jaren. Thank you all for listening. See you around. Hey, thanks for listening to this episode of Web3 Galaxy Brain. To keep up with everything Web3, follow me on Twitter at Nicholas with four leading ins. You can find links to the topics discussed on today's episode in the show notes. Podcast feed links are available at Web3GalaxyBrain.com. Web3 Galaxy Brain airs live most Friday afternoons at 5 p.m. Eastern time, 2200 UTC on Twitter spaces. I look forward to seeing you there.