mev-beta/docs/PRODUCTION_RUN_ANALYSIS.md

MEV Bot - 5-Minute Production Run Analysis

Test Date: October 23, 2025 Duration: 5+ minutes Branch: feature/production-profit-optimization Status: 🔴 CRITICAL ISSUES FOUND

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📊 Executive Summary

The 5-minute production test revealed a catastrophic failure in the token extraction system. While the bot successfully connects to RPC, processes blocks, and detects DEX transactions, 100% of all swap events are being rejected due to zero address corruption.

Critical Metrics

Metric	Value	Status
Blocks Processed	8,249	✅ Good
DEX Transactions Detected	855	✅ Good
Successfully Parsed Events	0	❌ CRITICAL
Zero Address Rejections	855 (100%)	❌ CRITICAL
Arbitrage Opportunities	0	❌ CRITICAL
Success Rate	0.00%	❌ CRITICAL
RPC Connection	Stable	✅ Good

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🔴 CRITICAL ISSUE: 100% Zero Address Corruption

Problem Description

Every single DEX transaction is being rejected with zero addresses for both PoolAddress, Token0, and Token1:

REJECTED: Event with zero PoolAddress rejected
TxHash: 0xaef6c4dff00dc5b462f3e3ecbf909cc049b6347e5ebc2b2342e01ab696998aef
Protocol: UniversalRouter
Type: Swap
Token0: 0x0000000000000000000000000000000000000000
Token1: 0x0000000000000000000000000000000000000000

What's Happening

1. ✅ DEX Detection Works: Bot correctly identifies DEX transactions

   • UniversalRouter transactions detected
   • TraderJoe multicalls detected
   • Uniswap V2/V3 swaps detected
   • SushiSwap transactions detected

2. ❌ Token Extraction Fails: Enhanced parser returns zero addresses

   • PoolAddress = 0x0000...0000 (should be actual pool contract)
   • Token0 = 0x0000...0000 (should be source token)
   • Token1 = 0x0000...0000 (should be destination token)

3. ❌ All Events Rejected: Zero address validation correctly blocks corrupted events

   • 855 detections
   • 855 rejections
   • 0% success rate

Examples from Logs

✅ DETECTION: "DEX Transaction detected: 0x871194... -> 0xa51afa... calling execute (UniversalRouter)"
❌ EXTRACTION: "REJECTED: Token0: 0x0000...0000, Token1: 0x0000...0000"

✅ DETECTION: "DEX Transaction detected: 0x1c8435... -> 0x87d663... (TraderJoeRouter) calling multicall"
❌ EXTRACTION: "REJECTED: Token0: 0x0000...0000, Token1: 0x0000...0000"

✅ DETECTION: "DEX Transaction detected: 0x34ce19... -> 0x1b81d6... calling exactInputSingle (UniswapV3)"
❌ EXTRACTION: "REJECTED: Token0: 0x0000...0000, Token1: 0x0000...0000"

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🔍 Root Cause Analysis

The Enhanced Parser Integration Is NOT Working

Despite the logs showing:

✅ ENHANCED EVENT PARSER CREATED SUCCESSFULLY
✅ ENHANCED EVENT PARSER INJECTED INTO PIPELINE

The enhanced parser is not actually being used for token extraction. Evidence:

1. L2 Parser Has Working Token Extraction

   • pkg/arbitrum/l2_parser.go contains ExtractTokensFromCalldata()
   • This method works correctly (proven in previous tests)
   • Uses proper ABI decoding for UniversalRouter, Multicall, etc.

2. Event Parser Not Using L2 Parser

   • pkg/events/parser.go has enhanced parser reference
   • But token extraction calls are not routing to L2 parser
   • Falls back to broken multicall.go extraction

3. Multicall.go Still Being Used

   • pkg/calldata/multicall.go has corrupted heuristic extraction
   • Returns zero addresses for complex calldata
   • This is what's actually being called

The Integration Problem

The enhanced parser was created and injected, but the actual token extraction code path in the event processing pipeline is not calling the enhanced parser's L2 token extraction methods.

Current (Broken) Flow:

DEX Transaction Detected
  ↓
Event Created
  ↓
Token Extraction Called
  ↓
❌ STILL USES: pkg/calldata/multicall.go (heuristic extraction)
  ↓
Returns Zero Addresses
  ↓
Event Rejected

Required (Working) Flow:

DEX Transaction Detected
  ↓
Event Created
  ↓
Token Extraction Called
  ↓
✅ SHOULD USE: Enhanced Parser → L2 Parser → ExtractTokensFromCalldata()
  ↓
Returns Real Addresses
  ↓
Event Processed for Arbitrage

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💡 Why This Happened

Integration Was Incomplete

The enhanced parser integration in pkg/monitor/concurrent.go (lines 138-160) successfully:

• ✅ Created the enhanced parser with L2 token extraction capability
• ✅ Injected it into the pipeline
• ✅ Made it available to the system

But it failed to update the actual call sites where token extraction happens:

• ❌ pkg/events/parser.go - Event creation still calls old extraction
• ❌ pkg/calldata/swaps.go - Swap parsing still uses multicall.go
• ❌ pkg/calldata/multicall.go - Heuristic extraction still primary

The Missing Link

The enhanced parser needs to be called directly during event processing, not just made available. The event parser needs code like:

// CURRENT (Broken):
tokens := multicall.ExtractTokensFromCalldata(tx.Data())  // ❌ Returns zeros

// REQUIRED (Working):
tokens := enhancedParser.ExtractTokensFromTransaction(tx, receipt, logs)  // ✅ Uses L2 parser

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📋 Detailed Findings

1. System Startup (✅ WORKING)

✅ RPC connection successful (30s timeout working)
✅ Chain ID: 42161 (Arbitrum)
✅ Enhanced parser created with L2 token extraction
✅ Pipeline injection successful
✅ Block monitoring started

2. Block Processing (✅ WORKING)

✅ 8,249 blocks processed in 5 minutes
✅ Average: ~27 blocks/second (Arbitrum's ~250ms block time)
✅ No RPC disconnections
✅ No timeout issues
✅ Connection stability: 100%

3. DEX Detection (✅ WORKING)

✅ 855 DEX transactions detected
✅ Protocols detected:
   - UniversalRouter (most common)
   - TraderJoe Multicall
   - Uniswap V2/V3
   - SushiSwap
   - Position Manager
✅ Function calls correctly identified:
   - execute()
   - multicall()
   - exactInputSingle()
   - swapExactTokensForTokens()

4. Token Extraction (❌ CATASTROPHIC FAILURE)

❌ 0 successful extractions out of 855 attempts
❌ 100% zero address corruption rate
❌ Enhanced parser not being called for extraction
❌ Falling back to broken heuristic extraction
❌ All events rejected due to zero addresses

5. Arbitrage Detection (❌ NO DATA)

❌ 0 opportunities detected (no valid events to analyze)
❌ 0 executions attempted
❌ 0 profit captured
❌ System is functionally non-operational

6. Error Patterns

Every 10 Seconds:

[ERROR] CRITICAL PARSING ALERT: Success rate 0.00% is critically low (total: 107)
[WARN] PARSING CORRUPTION: 107 zero address events rejected (100.00% of total)
[WARN] HIGH ERROR RATE: 100.00% parsing failures detected

On Every DEX Transaction:

[INFO] DEX Transaction detected: [correct detection]
[WARN] REJECTED: Event with zero PoolAddress rejected - [zero addresses]

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🛠️ What's Missing

1. Direct Enhanced Parser Integration in Event Processing

File: pkg/events/parser.go Issue: Token extraction not calling enhanced parser Fix: Update ParseSwapEvent() to use enhanced parser's L2 extraction

2. Enhanced Parser Method Exposure

File: pkg/interfaces/token_extractor.go Issue: Interface may not have correct methods exposed Fix: Ensure ExtractTokensFromTransaction() is in interface

3. Pipeline Token Extraction Routing

File: pkg/market/pipeline.go Issue: Pipeline not routing to enhanced parser for tokens Fix: Update event processing to call enhanced parser directly

4. Fallback Removal

File: pkg/calldata/multicall.go Issue: Broken heuristic extraction still being used Fix: Remove as primary extraction method, use only as last resort

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✅ What's Working Well

Production Improvements Validated

1. RPC Connection Stability ✅

   • 30s timeout working perfectly
   • No connection drops in 5+ minutes
   • Stable chain ID verification

2. Block Processing ✅

   • High throughput (27 blocks/second)
   • No lag or delays
   • Efficient transaction filtering

3. DEX Detection ✅

   • Accurate protocol identification
   • Correct function signature matching
   • Good coverage of major DEXs

4. Logging & Monitoring ✅

   • Clear error messages
   • Proper rejection logging
   • Health score reporting (though score is wrong due to no valid data)

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🎯 Immediate Action Items

Priority 1: Fix Token Extraction (CRITICAL)

Estimated Time: 2-3 hours

1. Update Event Parser (pkg/events/parser.go)

   • Add enhanced parser field
   • Call enhancedParser.ExtractTokensFromTransaction()
   • Remove multicall.go fallback

2. Verify L2 Parser Integration (pkg/arbitrum/l2_parser.go)

   • Ensure ExtractTokensFromCalldata() is exposed
   • Add transaction context parameter if needed
   • Test with real UniversalRouter calldata

3. Update Pipeline (pkg/market/pipeline.go)

   • Route token extraction through enhanced parser
   • Add validation that tokens are non-zero
   • Log successful extractions

4. Test Validation

   • Run bot for 1 minute
   • Verify >0% success rate
   • Check that PoolAddress, Token0, Token1 are real addresses

Priority 2: Validate Arbitrage Detection (HIGH)

Estimated Time: 1-2 hours

1. Confirm Event Processing

   • Verify events reach arbitrage service
   • Check profit calculations with real data
   • Monitor opportunity detection

2. Test Profit Tier System

   • Validate tier classification works
   • Check execution size requirements
   • Verify gas cost calculations

Priority 3: Production Monitoring (MEDIUM)

Estimated Time: 1 hour

1. Add Success Rate Alerts

   • Alert if success rate < 50% for 1 minute
   • Alert if zero opportunities for 5 minutes
   • Add dashboard with real-time metrics

2. Health Probe Integration

   • Mark unhealthy if success rate = 0%
   • Add readiness check for valid events
   • Implement startup probe with 60s grace period

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📈 Expected Results After Fix

Realistic Production Targets

Based on 855 detected transactions in 5 minutes:

Metric	Current	After Fix	Improvement
Success Rate	0.00%	70-90%	+infinite
Valid Events/Min	0	120-150	+infinite
Opportunities/Min	0	1-5	+infinite
Profit/Hour	$0	$5-50	+infinite

Conservative Estimates

• Token Extraction Success: 80-90% (some complex multicalls may still fail)
• Arbitrage Opportunities: 0.5-2% of valid events (1-3 per minute)
• Execution Success: 50-70% (competition, gas prices, slippage)
• Daily Profit: $100-1000 (depends on capital, gas prices, market conditions)

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🔧 Technical Debt Identified

Code Quality Issues

1. Incomplete Refactoring

   • Enhanced parser created but not integrated
   • Old extraction code not removed
   • Multiple code paths for same function

2. Testing Gaps

   • No integration test for enhanced parser usage
   • No validation that L2 extraction is called
   • Missing end-to-end parsing tests

3. Documentation Needed

   • Token extraction flow not documented
   • Enhanced parser usage not explained
   • Architecture diagrams missing

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📝 Conclusion

Summary

The MEV bot has excellent infrastructure (RPC stability, block processing, DEX detection) but is completely non-functional due to a critical token extraction failure.

The Good News

• ✅ All production improvements are working
• ✅ The fix is straightforward (2-3 hours)
• ✅ L2 parser already has working extraction code
• ✅ Just need to wire it up correctly

The Bad News

• ❌ Bot cannot detect a single arbitrage opportunity
• ❌ 100% of DEX transactions are being wasted
• ❌ System is generating revenue of $0

Next Steps

Immediate (Today):

1. Fix token extraction routing to use enhanced parser
2. Verify >0% success rate in 1-minute test
3. Run 30-minute validation test

Short Term (This Week):

1. Add comprehensive integration tests
2. Implement success rate monitoring
3. Deploy to production with health probes

Medium Term (Next Week):

1. Optimize for 90%+ extraction success rate
2. Tune profit tier thresholds based on real data
3. Implement dynamic gas strategy validation

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Generated: October 23, 2025 Status: 🔴 CRITICAL FIX REQUIRED Priority: P0 - Blocks All Profit Estimated Fix Time: 2-3 hours