At Radius, we’re building the economic infrastructure to help L2s capture revenue with MEV, while opening up arbitrage profit opportunities for searchers. We explore the future of L2 economies through hands-on research, digging into MEV dynamics, economic design, and sequencing mechanisms that enable fair and sustainable growth.

Overview

L2s are struggling to sustain growth with transaction fees as their primary revenue source. At Radius, we're helping rollups tap into MEV more fairly, specifically through backrunning arbitrage opportunities uncovered with searchers.

To explore how arbitrage can drive L2 revenue, we teamed up with Orakle, KAIST’s blockchain research group, to analyze arbitrage activity on Optimism. Together, we uncovered what drives profitability, from trading volume to fee structure, so L2s can boost revenue and searchers can lock in the best opportunities in fast-growing rollup ecosystems.

Key Research Insights

We looked at OP Mainnet data from June 23, 2023, to November 30, 2024, and uncovered several findings:

• DEX Volume Fuels Arbitrage: More DEX trading volume means more arbitrage opportunities. Higher volume leads to bigger price fluctuations and better chances to profit.

• Cross-DEX Arbitrage Outperforms: Arbitrage across DEXs like Velodrome V2 and Uniswap brings in way more profit than sticking to one DEX. This highlights the value of routing across different DEXs.

• Top Pools for Profit: The most lucrative pools involve assets like WETH, USDC, DAI, and OP (e.g., Uniswap v3 WETH/USDC). These pools give searchers clear targets and help L2s attract higher-value trading flows.

Explore the full research report by Orakle and Radius here: Arbitrage Profit Analysis

Dive into our research methodology and detailed findings here.

We sourced onchain data from Optimism using Lambda 256’s Nodit.

The Economic Infrastructure for Ethereum

We’re developing Secure Block Building (SBB) to unlock backrunning arbitrage opportunities, helping L2s capture profits transparently and fairly. With SBB, searchers can find opportunities on high-volume DEXs and cross-DEX setups to maximize profit, while L2s get a share of that value through SBB’s mechanism.

Looking ahead, cross-rollup environments will unlock even more value than single-rollup ones. Our Lighthouse Network enables searchers to operate across L2s, L1, and CEXs, scaling MEV opportunities across Ethereum’s growing ecosystem and helping L2s monetize those flows.

Partner With Us

We’re already working with L2s like Fuse and Swell to demonstrate how SBB creates scalable, fair MEV infrastructure that drives revenue and opportunity across rollup ecosystems.

Contact our research team (@Hyunxukee) to discuss how Radius can help, or follow us on X at @radius_xyz.