# Production pipeline (reference)

**Last Updated:** 2026-04-13  
**Document Version:** 1.0  
**Status:** Reference

This is a **systems-level** description of how serious searchers and builders often structure work: **predict post-trade state, simulate, bid for ordering, settle**. Details differ by chain, relay, and builder market.

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## Core loop (conceptual)

1. **Ingest** chain head state, pool reserves, and (where available) **pending** transactions or private flow.  
2. **Model** candidate state transitions (e.g. apply pending tx to a local view of state).  
3. **Search** for profitable routes or reactions (cycles, backruns, liquidations).  
4. **Simulate** deterministically in an EVM-equivalent environment with **gas** and fee models.  
5. **Decide** under risk limits (inventory, gas caps, failure modes).  
6. **Package** signed transactions into **bundles** or other relay payloads.  
7. **Submit** to relays, builders, or public mempool; track inclusion and PnL.  
8. **Observe** failures, latency, and counterparties; feed back into strategy.

The system is not simply “find arb then send tx”; it is **compete for ordering** against others running similar loops.

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## Layer breakdown

### Data layer

**Inputs:** RPC (archive when historical replay matters), mempool or builder streams, pool factories, logs, optional CEX/oracle feeds.

**Outputs:** Normalized pool graph edges, reserves, fees, and **candidate triggers** (new block, new pending tx, new pool).

**Typical stack (illustrative):** Self-hosted or low-latency RPC, websocket or fiber mempool feeds, indexers, Redis or in-memory hot state, PostgreSQL for metadata and analytics.

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### Simulation engine

**Role:** Given state `S` and a candidate action, compute post-state, balances, and **net** profit after gas and protocol fees.

**Requirements:** Deterministic EVM behavior, correct token transfer semantics, gas metering, and **parallel** evaluation of many candidates.

This layer is often the **main technical moat** after raw data access.

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### Strategy engine

**Role:** Choose **which** opportunities to pursue, size, and gas or builder tip policy under constraints (slippage, inventory, max loss, cooldowns).

**Includes:** Graph search / path enumeration, scoring, and integration with **capital** limits.

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### Execution layer

**Role:** Turn a simulated opportunity into an **included** on-chain outcome.

**Mechanisms (chain-dependent):** Bundles via relays (e.g. Flashbots-style flows), direct builder relationships, private orderflow, or public mempool with aggressive priority fees.

**Win rate** is dominated by this layer plus simulation quality, not only “alpha” detection.

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### Smart contract layer

**Role:** Atomic multi-hop swaps, flash loans, callbacks, and **revert-safe** accounting so failed attempts do not destroy inventory.

**Requirements:** Gas discipline, minimal external calls, clear failure modes.

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### Capital layer

**Role:** Inventory across tokens and chains, treasury movements, and **rebalancing** after runs.

**Techniques:** Pre-funded inventory, internal netting across strategies, flash liquidity (bounded by depth and fees).

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### Latency and placement

**Role:** Reduce time from **signal** to **submission**, and improve placement in the **auction** for blockspace.

**Knobs:** Geography, peering, NIC/kernel tuning, colocation (where allowed), direct builder APIs.

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## Mapping to `MEV_Bot` implementation specs

The **`MEV_Bot`** submodule (see parent **proxmox** repo) names concrete services in `specs/SERVICE_ARCHITECTURE_AND_MESSAGE_CONTRACTS.md`. Rough alignment:

| This reference layer | `MEV_Bot` service (MVP spec) |
|----------------------|----------------------------|
| Data: pools, reserves, blocks | `PoolIndexerService`, `StateIngestionService` |
| Liquidity graph | `LiquidityGraphService` |
| Opportunity search | `OpportunitySearchService` |
| Simulation | `SimulationService` |
| Strategy / risk (partially in sim + ops) | Config + scoring in `SEARCH_AND_SIMULATION_SPEC` / ops docs |
| Bundle build | `BundleBuilderService` |
| Execution / relay | `ExecutionGateway` |
| Settlement and PnL | `SettlementAnalyticsService` |
| Mempool-driven rescoring (optional) | `MempoolWatcherService` (noted as optional in spec) |

Use **`MEV_Bot/specs/README.md`** for the authoritative reading order and scope boundaries.

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## Related

- [ARCHITECTURE.md](ARCHITECTURE.md) — Mermaid diagrams of the same pipeline  
- [OPPORTUNITY_TAXONOMY.md](OPPORTUNITY_TAXONOMY.md) — what kinds of opportunities exist  
- [SCALING_AND_REALITY.md](SCALING_AND_REALITY.md) — competition and scaling