The efficiency and rationality assumptions of DeFi markets are often, naively, taken as granted. In reality, properly functioning markets must be engineered. The challenge is complex, both academically and computationally; however, the juice is worth the squeeze– ensuring that capital remains in motion, liquidity flows across venues, and trading activity is continuously sustained.
Addressing These Challenges with Bancor’s Arb Fast Lane
The most advanced arbitrage framework in DeFi
Unmatched computational efficiency
200x improvement in execution speed over previously published algorithms
The result of years of research and development, mathematical modeling, and a direct answer to real-world market inefficiencies.
“Our exploration is rigorous, challenges conventional wisdom, and contributes the groundwork for future advancements in computational arbitrage methods.”–Dr. Mark Richardson, Bancor Project Lead
Seamlessly integrated into Carbon DeFi, it functions as an autonomous, onchain liquidity coordinator, aggregating liquidity across exchanges, maintaining price equilibrium, and ensuring that capital remains active- ameliorating stagnation in specific protocols and inefficiencies across blockchain ecosystems in general.
Its January performance on Sei and Celo underscores its transformative impact.
January Performance: Arbitrage at Scale
These numbers aren’t just data points. Every transaction executed is a precise adjustment to market conditions, aligning token prices, and reflects the constant recalibration of liquidity across two blockchain ecosystems.
Sei Network
Gas Consumed: 24,606,759,109
Transactions Executed: 51,219
Gas Usage Rank: 20th
Celo
Gas Consumed: 65,885,203,608
Transactions Executed: 178,089
Gas Usage Rank: 23rd
The Most Advanced Arbitrage Framework in DeFi
At its core, the Arb Fast Lane is an intelligent execution system designed to ensure that liquidity flows seamlessly across an entire blockchain.
How Precise is It?
The Arb Fast Lane executes with precision down to the quadrillionths– that’s 15 decimal places– ensuring orders are quickly filled at the exact optimal price with zero unnecessary slippage.
But how does it achieve this level of precision at scale?
Why Most Arbitrage Models Are Broken
Most arbitrage models today? Inefficient. Slow. Computationally expensive.
“Traditional arbitrage methods relying on convex optimization struggle in AMM-driven markets because they assume smooth constraints that rarely exist in practice. As detailed in the paper, convex formulations, while effective for canonical xy=k curves, fall short when applied to concentrated liquidity AMMs.In these settings, the optimization problem involves piecewise-linear constraints, where solutions frequently lie at the boundary of the feasible region. This mismatch forces solvers into convergence challenges, as gradient-based methods fail near abrupt transitions and simplex methods jump between vertices. The result is a system that, despite its mathematical elegance, is slow, unpredictable, and ill-suited for real-time arbitrage where every millisecond counts.”— Dr. Mark Richardson, Bancor Project Lead
In layman’s terms:
Too many variables → Markets shift before trades execute.
High-dimensional optimization problems → Computational bottlenecks.
Arbitrage spreads linger → Capital is inefficiently allocated.
The Breakthrough: Marginal Price Optimization
Bancor’s researchers have developed a breakthrough solution, the Arb Fast Lane– a cutting-edge arbitrage framework that eliminates redundant computations by focusing solely on the marginal price frontier, where the optimal trade already exists.
This approach — Marginal Price Optimization — isn’t just an improvement. It’s a fundamental shift in how arbitrage is handled.
Marginal Price Optimization reduces the optimization problem from a two-variables-per-curve scenario to a one-variable-per-token root-finding exercise, delivering:
200x improvement in execution speed
Scalability across any AMM model
Unmatched computational efficiency
Instant price alignment across liquidity pools
Dr. Mark Richardson, Bancor Project Lead:
“What we have tried to create here is a conceptual shift in how arbitrage and routing problems are addressed in AMM-driven markets. At the heart of our study is a reevaluation of traditional convex optimization approaches. We confront situations where conventional methods struggle with convergence and numerical stability. By refocusing the problem on marginal price optimization, we have reduced a complex, high-dimensional task into a more manageable root-finding problem.”
Nine Distinct Arbitrage Modes
The Arb Fast Lane operates through nine distinct arbitrage modes, each optimized for different liquidity conditions, token ecosystems, and exchange mechanics.
These modes are not static trading strategies- they are dynamically selected execution pathways that adjust in real time based on market conditions.
Single & Multi Arbitrage
Single
Direct arbitrage between one Carbon DeFi curve and one external exchange curve.
Multi
Arbitrage across multiple Carbon DeFi curves against one external exchange curve.
Multi-All
Searches across all available DEXs for the most efficient pairwise arbitrage opportunity.
Triangular Arbitrage
Triangle
Triangular arbitrage between one Carbon DeFi curve and two external exchange curves.
Multi-Triangle
Executes the same triangular strategy but across multiple Carbon DeFi curves for maximum capital efficiency.
Bancor v3
Triangular arbitrage between two Bancor v3 pools and one external exchange.
Bancor v3–2 Hop
A more gas-efficient version of Bancor v3 triangular arbitrage.
Specialized Liquidity Routing
Multi-BAL
Always routes through n-dimensional, variable-weight AMMs.
Multi-POL
Always routes through Bancor’s protocol-owned liquidity contract.
The Arb Fast Lane doesn’t stop at execution efficiency- it also optimizes liquidity flows through seamless native token wrapping and unwrapping.
Native Token Wrapping & Unwrapping: Solving Cross-DEX Liquidity Fragmentation
Many blockchain ecosystems require tokens to be wrapped and unwrapped to be used in different liquidity pools. This process is often inefficient, adding extra steps and manual intervention for traders and arbitrageurs.
The Arb Fast Lane automates this process, allowing liquidity to move freely between native and wrapped tokens without disrupting execution.
For example, on Sei Network, trading between SEI and WSEI requires constant wrapping and unwrapping to maintain price equilibrium. The Arb Fast Lane ensures this happens automatically and at scale, eliminating execution delays and ensuring cross-DEX liquidity remains synchronized.
A Critical Piece for Blockchains
Without the Arb Fast Lane, networks suffer from:
Liquidity fragmentation — Capital is trapped in isolated pools instead of flowing efficiently across venues.
Inefficient price discovery — Market imbalances persist, reducing execution quality.
Low velocity of liquidity — Without constant engagement, liquidity stagnates, and trading activity declines.
The Arb Fast Lane solves these issues at scale, providing:
Dynamic price equilibration — The framework ensures stable, accurate pricing across all trading venues.
Sustained market activity — Arbitrage drives continuous trading volume, keeping blockchains active.
Efficient capital utilization — Liquidity is always moving, optimizing its impact on execution quality.
Deploying the Arb Fast Lane is a direct investment in network efficiency, adoption, and liquidity growth, see here for more.
Why Token Projects Rely on the Arb Fast Lane
For token projects, relying solely on a single liquidity pool or exchange listing is a losing strategy. Without sustained liquidity, price stability, and active trading, tokens risk stagnation.
Carbon DeFi’s intent-based liquidity model, paired with the Arb Fast Lane, ensures that token markets remain stable, active, and deeply integrated within the broader DeFi ecosystem.
If liquidity isn’t on Carbon DeFi, token projects are missing out on the most advanced trading environment available, and their token may be suffering as a result.
See my previous publication A Token Listing Isn’t Enough — Here’s What Your Project Actually Needs
Arbitrage IS Infrastructure
Misaligned prices, fragmented liquidity, and inefficient execution cost blockchains and token projects millions in lost trading volume. The Arb Fast Lane solves these inefficiencies at scale.
See It in Action.
Stay updated on all the latest onchain activity and track these transactions as they happen by joining the Bancor Ecosystem Alerts Telegram: https://t.me/@BancorEcosystemAlerts.
Unlock your blockchain or token project’s full liquidity potential- send a message to [email protected].
Recommended read: How Arbitrage and Aggregated Liquidity Enhance Blockchain Ecosystems and Token Projects–The Latest on Bancor’s Arb Fast Lane
