I Created MEV Arbitrage Bot with ChatGPT $1,467 in a Day Passive Income

MagISL | Web3
18 Mar 202405:57

TLDRThe video demonstrates the creation of a MEV arbitrage bot using ChatGPT, which exploits decentralized finance (DeFi) opportunities on the Ethereum blockchain for passive income. The bot automatically trades tokens using Uniswap, capitalizing on arbitrage by injecting transactions with higher gas fees to profit from price slippage. The creator emphasizes the bot's ease of use, requiring no coding experience, and shows the process of setting up the bot on Remix and funding it with Ethereum. The video concludes with the creator sharing impressive profits and encourages viewers to engage and explore AI and web 3 tools for passive income.

Takeaways

  • 🤖 The script describes the creation of an MEV (Miners Extractable Value) Arbitrage Bot using ChatGPT in the decentralized finance space.
  • 🚀 The bot automatically trades tokens on the Ethereum blockchain, leveraging DeFi liquidity pairs to exploit arbitrage opportunities for passive income.
  • 📈 The bot operates by sniffing pending transactions within a block and injecting its own with a higher gas fee to process first, profiting from the price slippage.
  • 💡 No coding experience is required as the trading bot script was entirely generated by ChatGPT.
  • 🔧 Users need to have MetaMask installed and connected to the Ethereum mainnet to use the bot.
  • 📝 The script provides a step-by-step guide on how to set up and deploy the bot using Remix, a web 3 platform for smart contract development.
  • 💰 The bot requires funding with Ethereum to snipe liquidity pairs effectively, with the potential for higher profits with larger initial deposits.
  • 🔄 The bot runs by itself, sniffing and sandwiching transactions, and can be stopped and withdrawn at any time by the user.
  • 📊 The video demonstrates a 35% profit in Ethereum after running the bot for 12 hours, with potential weekly profits varying between 2 to 8 Ethereum.
  • 📌 The script encourages viewers to share their earnings and questions in the comments and to subscribe for more content on making passive income with AI and web 3 tools.

Q & A

  • What is the main purpose of the trading bot created with ChatGPT?

    -The main purpose of the trading bot is to take advantage of arbitrage opportunities in decentralized finance (DeFi) using liquidity pairs on the Ethereum blockchain to earn passive income.

  • How does the MEV arbitrage bot function in the context of decentralized finance platforms?

    -The bot functions by sniffing for pending transactions within a block and injecting its own transactions with a higher gas fee. This allows the bot's transactions to be processed before the pending ones, enabling it to profit from the slippage difference in the transaction.

  • What is the role of Uniswap in the bot's operation?

    -Uniswap is a decentralized finance platform that the bot uses for arbitrage transactions. It is one of the platforms where the bot can identify and take advantage of price differences to earn profits.

  • What are the requirements for using the MEV arbitrage bot?

    -To use the MEV arbitrage bot, one needs to have the MetaMask browser extension installed and connected to the Ethereum mainnet. Additionally, a basic understanding of how to interact with smart contracts on platforms like Remix is necessary.

  • How does the bot's source code get compiled and deployed?

    -The bot's source code is compiled and deployed using Remix, a web 3 platform for developing, compiling, deploying, and running smart contracts written in Solidity. The user must paste the provided source code into a new contract on Remix, compile it, and then deploy it to the Ethereum blockchain using an injected provider like MetaMask.

  • What is the significance of gas fees in deploying and running the bot?

    -Gas fees are essential as they act as a commission on the Ethereum network for smart contract deployment and transaction processing. Higher gas fees can speed up the transaction processing, allowing the bot to execute its arbitrage strategies more efficiently.

  • How does the bot sandwich transactions to profit from slippage?

    -The bot sandwiches its transactions between pending ones by offering a higher gas fee. Once its transaction is processed, it immediately processes a sell order in the same block. This sandwiching results in profit from the price difference or slippage caused by market fluctuations during the time the original transaction was pending.

  • What is the role of Etherscan in the bot's operation?

    -Etherscan is used to verify the successful creation and deployment of the smart contract by pasting the contract address. It also allows users to track the contract's transactions and funds to ensure that the bot is operating correctly and securely.

  • How does the bot generate passive income for the user?

    -The bot generates passive income by continuously monitoring and executing arbitrage opportunities on the Ethereum blockchain. The profits are accumulated over time, and the user can withdraw their initial deposit along with the profits by using the 'withdraw' function of the bot.

  • What is the recommended strategy for funding the contract to maximize profits?

    -The more Ethereum a user deposits into the smart contract, the larger the transactions the bot can sandwich, leading to higher potential profits. However, the user should consider their risk tolerance and investment goals when deciding how much to deposit.

  • How can a user monitor the bot's performance and profits?

    -A user can monitor the bot's performance by checking their MetaMask wallet for the accumulated profits and by using Etherscan to track the smart contract's activity on the Ethereum blockchain.

Outlines

00:00

🤖 Introducing the DeFi Trading Bot

The paragraph introduces a trading bot designed for decentralized finance (DeFi), which uses liquidity pairs to capitalize on arbitrage opportunities. The bot operates automatically on the Ethereum blockchain, leveraging platforms like Uniswap for arbitrage transactions. It can inject transactions with higher gas fees to override pending ones, profiting from the price difference (slippage). The script emphasizes that no coding experience is needed, as the bot was generated by ChatGBT. It provides a step-by-step guide on setting up the bot, including installing Metamask, using Remix for smart contract development, compiling and deploying the bot's code, and funding the contract with Ethereum to start the arbitrage process.

05:01

💰 Reviewing Profits and Withdrawal Process

This paragraph discusses the review of profits after running the DeFi trading bot for over 12 hours. The creator shares their earnings, showing a 35% profit and later a 72% profit after another 12 hours. The bot's efficiency is highlighted, with the creator mentioning personal experiences of earning 2 to 8 Ethereum over weeks. The paragraph also explains the withdrawal process, where the bot exits the liquidity pool and returns the initial Ethereum deposit along with the accumulated profit to the user's wallet. The creator encourages viewers to ask questions, share their earnings, and subscribe for more content on passive income with AI and Web 3 tools.

Mindmap

Keywords

💡MEV Arbitrage Bot

The MEV Arbitrage Bot is a trading bot that operates within the decentralized finance (DeFi) space, specifically on the Ethereum blockchain. It utilizes liquidity pairs to capitalize on arbitrage opportunities, which are discrepancies in asset prices across different markets. The bot automatically trades tokens, leveraging the MEV (Miner Extractable Value) to insert its transactions within blocks that contain pending transactions, allowing it to profit from the price differences. This is a key concept in the video, as the creator demonstrates how the bot can generate passive income without manual intervention, showcasing its potential for users interested in DeFi and passive earnings.

💡ChatGPT

ChatGPT is an AI language model developed by OpenAI, known for its ability to generate human-like text based on the prompts it receives. In the context of the video, the creator mentions using ChatGPT to generate the trading bot script, highlighting the AI's capability to assist in creating complex tools for DeFi. This keyword is central to the video's narrative, as it underscores the innovative use of AI in the financial sector and the potential for non-coders to leverage technology for financial gain.

💡Decentralized Finance (DeFi)

Decentralized Finance, or DeFi, refers to a financial system built on blockchain technology, which operates without a central authority. In the video, DeFi platforms like Uniswap are mentioned as venues where the MEV Arbitrage Bot operates, taking advantage of liquidity pools and price discrepancies to generate profits. DeFi is a crucial concept as it forms the backbone of the bot's functionality and the creator's strategy for earning passive income.

💡Uniswap

Uniswap is a popular decentralized exchange (DEX) built on the Ethereum blockchain that allows for the trading of various cryptocurrencies without the need for a centralized authority. In the video, Uniswap is identified as one of the platforms where the MEV Arbitrage Bot seeks out arbitrage opportunities. It is an essential keyword because it exemplifies the DeFi ecosystem where the bot operates and profits are generated.

💡Liquidity Pairs

Liquidity pairs refer to the combination of two cryptocurrencies that are pooled together in a liquidity pool on a decentralized exchange. These pairs are used to facilitate trades between the two assets. In the context of the video, the MEV Arbitrage Bot uses these liquidity pairs to identify arbitrage opportunities and execute trades, profiting from the price differences that may exist between them. This keyword is significant as it directly relates to the bot's mechanism for earning income.

💡Arbitrage

Arbitrage is the practice of taking advantage of a price difference between two or more markets to make a profit. In the video, the MEV Arbitrage Bot is designed to identify and capitalize on these price discrepancies, known as arbitrage opportunities, within the DeFi space. The concept is central to the video as it explains the fundamental strategy the bot employs to generate passive income for the user.

💡Ethereum Blockchain

The Ethereum Blockchain is a decentralized, open-source blockchain that features smart contract functionality. It is the platform where the MEV Arbitrage Bot operates, trading tokens and taking advantage of DeFi protocols. The Ethereum Blockchain is integral to the video's content as it provides the infrastructure for the bot's transactions and the DeFi ecosystem as a whole.

💡MetaMask

MetaMask is a browser extension and mobile wallet that allows users to interact with the Ethereum blockchain and use dApps (decentralized applications). In the video, the creator instructs viewers to install MetaMask to connect with the Ethereum mainnet and manage the deployment of the MEV Arbitrage Bot. MetaMask serves as a key tool in the process of setting up and using the bot, illustrating the practical application of blockchain technology in everyday financial activities.

💡Smart Contracts

Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They are a foundational component of blockchain technology, particularly on the Ethereum Blockchain. In the video, the MEV Arbitrage Bot is a smart contract that, once deployed, automatically performs its functions without further intervention. The concept of smart contracts is central to the video as it enables the bot's operation and the entire DeFi strategy.

💡Gas Fees

Gas fees on the Ethereum network are the transaction costs required to perform operations, such as deploying smart contracts or executing trades. In the video, the creator mentions paying gas fees for the deployment of the MEV Arbitrage Bot and for its transactions. Gas fees are a critical aspect of Ethereum-based activities, as they compensate miners for processing and validating transactions, and they can significantly impact the profitability of DeFi strategies.

💡Slippage

Slippage refers to the difference between the expected price of a trade and the actual price at which it is executed. In the context of the video, the MEV Arbitrage Bot profits from slippage by capitalizing on price discrepancies that occur during transactions. Slippage is an important concept because it is the source of potential profit for the bot and a key consideration for users when engaging in DeFi activities.

💡Etherscan

Etherscan is a blockchain explorer for the Ethereum network that allows users to view and verify transactions, smart contracts, and addresses. In the video, the creator uses Etherscan to confirm the creation of the smart contract and to check the balance associated with the MEV Arbitrage Bot. Etherscan is a vital tool for transparency and verification within the Ethereum ecosystem, as it provides a way to track and validate the operations of the bot.

Highlights

Created a MEV Arbitrage Bot using ChatGPT

Potential of ChatGPT in decentralized finance

Trading bot generates passive income

Automatically trades tokens from Ethereum blockchain

Utilizes decentralized finance platforms like Uniswap

Injects transactions with higher gas fees

Profits off slippage difference in transactions

No coding experience required

Metamask browser extension and Ethereum mainnet required

Develop smart contracts with Remix

Source code provided in the description

Compile and deploy the smart contract

Gas fees for smart contract deployment

Etherscan confirms smart contract creation

Fund contract with Ethereum for liquidity sniping

Snipes liquidity pairs for sandwiching transactions

Start the bot for 12 hours and check profits

35% profit after just over 12 hours

Withdraw profits and return Ethereum to wallet

Profits can vary from week to week

Made up to 8 Ethereum in some weeks

Share earnings and subscribe for more passive income methods

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