Initial commit: Set up MEV bot project structure

docs/architecture.md

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+# MEV Bot Architecture
+
+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.
+
+Key responsibilities:
+- Connect to Arbitrum RPC endpoint
+- Monitor new blocks as they are added
+- Identify potential swap transactions
+- Extract transaction details
+
+### 2. 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
+- Estimate profitability after gas costs
+- Filter opportunities based on configured thresholds
+
+### 3. Uniswap Pricing
+Handles all Uniswap V3 pricing calculations.
+
+Key responsibilities:
+- Convert between sqrtPriceX96 and ticks
+- Calculate price impact of swaps
+- Work with liquidity values
+- Implement Uniswap V3 mathematical formulas
+
+### 4. Transaction Executor
+Responsible for executing profitable arbitrage transactions.
+
+Key responsibilities:
+- Construct arbitrage transactions
+- Optimize gas usage
+- Submit transactions to flashbots or similar services
+- Handle transaction confirmation and errors
+
+## 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
+
+## 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