Sequencer is working (minimal parsing)

docs/architecture.md

@@ -5,54 +5,99 @@ This document describes the high-level architecture of the MEV bot.
 ## Components
 
 ### 1. Arbitrum Monitor
-Responsible for monitoring the Arbitrum sequencer for new blocks and transactions.
+Responsible for monitoring the Arbitrum sequencer for L2 messages and new blocks to identify potential opportunities.
 
 Key responsibilities:
 - Connect to Arbitrum RPC endpoint
-- Monitor new blocks as they are added
-- Identify potential swap transactions
-- Extract transaction details
+- Monitor new blocks as they are added to the sequencer
+- Parse L2 messages to identify potential swap transactions
+- Extract transaction details from both blocks and L2 messages
+- Process transactions with minimal latency (every 250ms)
 
-### 2. Market Scanner
+### 2. Event Parser
+Analyzes transactions to detect DEX interactions and extract relevant event data.
+
+Key responsibilities:
+- Identify DEX contract interactions (Uniswap V2/V3, SushiSwap)
+- Parse transaction data for swap events
+- Extract token addresses, amounts, and pricing information
+- Convert raw blockchain data into structured events
+
+### 3. Market Pipeline
+Processes transactions through multiple stages for comprehensive analysis.
+
+Key responsibilities:
+- Multi-stage transaction processing
+- Concurrent processing with worker pools
+- Transaction decoding and event parsing
+- Market analysis using Uniswap V3 math
+- Arbitrage opportunity detection
+
+### 4. Market Scanner
 Analyzes potential swap transactions to determine if they create arbitrage opportunities.
 
 Key responsibilities:
-- Calculate price impact of swaps
-- Scan for arbitrage opportunities across pools
+- Calculate price impact of swaps using Uniswap V3 mathematics
+- Scan for arbitrage opportunities across multiple pools
 - Estimate profitability after gas costs
 - Filter opportunities based on configured thresholds
+- Use worker pools for concurrent processing
 
-### 3. Uniswap Pricing
-Handles all Uniswap V3 pricing calculations.
+### 5. Uniswap Pricing
+Handles all Uniswap V3 pricing calculations with precision.
 
 Key responsibilities:
 - Convert between sqrtPriceX96 and ticks
 - Calculate price impact of swaps
-- Work with liquidity values
+- Work with liquidity values for precise calculations
 - Implement Uniswap V3 mathematical formulas
+- Handle fixed-point arithmetic without floating-point operations
 
-### 4. Transaction Executor
+### 6. Transaction Executor
 Responsible for executing profitable arbitrage transactions.
 
 Key responsibilities:
 - Construct arbitrage transactions
-- Optimize gas usage
+- Optimize gas usage for maximum profitability
 - Submit transactions to flashbots or similar services
-- Handle transaction confirmation and errors
+- Handle transaction confirmation and error recovery
 
 ## Data Flow
 
-1. Arbitrum Monitor detects new blocks and transactions
-2. Potential swap transactions are sent to Market Scanner
-3. Market Scanner analyzes swaps and identifies opportunities
-4. Profitable opportunities are sent to Transaction Executor
-5. Transaction Executor constructs and submits arbitrage transactions
+1. Arbitrum Monitor reads L2 messages and new blocks from the sequencer
+2. Event Parser identifies DEX interactions and extracts event data
+3. Market Pipeline processes transactions through multiple analysis stages
+4. Market Scanner analyzes swaps and identifies arbitrage opportunities
+5. Profitable opportunities are sent to Transaction Executor
+6. Transaction Executor constructs and submits arbitrage transactions
 
 ## Configuration
 
 The bot is configured through config/config.yaml which allows customization of:
-- Arbitrum RPC endpoints
-- Polling intervals
-- Profit thresholds
-- Gas price multipliers
-- Logging settings
+- Arbitrum RPC endpoints and WebSocket connections
+- Polling intervals for block processing (as low as 250ms)
+- Profit thresholds for opportunity filtering
+- Gas price multipliers for transaction optimization
+- Logging settings for debugging and monitoring
+
+## L2 Message Processing
+
+The MEV bot specifically focuses on reading and parsing Arbitrum sequencer L2 messages to find potential opportunities:
+
+### L2 Message Monitoring
+- Connects to both RPC and WebSocket endpoints for redundancy
+- Subscribes to real-time L2 message feeds
+- Processes messages with minimal delay for competitive advantage
+- Implements fallback mechanisms for connection stability
+
+### Message Parsing
+- Identifies pool swaps and router swaps from L2 messages
+- Extracts transaction parameters before they are included in blocks
+- Calculates potential price impact from message data
+- Prioritizes high-value opportunities for immediate analysis
+
+### Real-time Processing
+- Implements 250ms processing intervals for rapid opportunity detection
+- Uses WebSocket connections for real-time data feeds
+- Maintains low-latency processing for competitive MEV extraction
+- Balances between processing speed and accuracy