At Radius, we are developing the economic infrastructure that enables Layer 2 (L2) to generate sustainable revenue from MEV while opening up arbitrage opportunities for searchers. Our research focuses on L2 economic design, sequencing mechanisms, and MEV dynamics, with the goal of helping the rollup ecosystem grow profitably.

Overview

Transaction fees alone are not sufficient for long-term L2 growth. To better understand how top-of-block backrunning arbitrage can contribute to L2 revenue, we teamed up with Orakle, the blockchain research group at KAIST, to analyze arbitrage activity on Optimism. Our joint study identified the main profitability drivers—including trading volume and fee structures—providing insights to help L2s strengthen their revenue models and support searchers in accessing the best opportunities.

Key Research Insights

We analyzed OP Mainnet from June 23, 2023, to November 30, 2024. Here’s what we found:

• DEX Volume Drives Arbitrage – Higher trading volumes on DEXs create more price discrepancies, which in turn increase arbitrage opportunities.

• Cross-DEX Arbitrage Performs Better – Strategies that route trades across platforms such as Velodrome V2 and Uniswap deliver significantly higher profits than single-DEX approaches.

• Most Profitable Pools – High-value pools involve tokens such as WETH, USDC, DAI, and OP, for example, Uniswap v3’s WETH/USDC pair, which represent strong targets for searchers and attract valuable trading activity to L2s.

See research report by Orakle and Radius: Arbitrage Profit Analysis

Dive into our research methodology and full findings here.

Data sourced from OP Mainnet via Lambda256’s Nodit.

Radius

Radius is building Secure Block Building (SBB) a framework for capturing MEV in a transparent and fair way through backrunning. SBB allows searchers to execute high-volume and cross-DEX strategies, while ensuring that L2s share in the resulting value.

Looking ahead, cross-rollup environments are expected to generate even more opportunities than isolated networks. Our upcoming Lighthouse will enable searchers to operate seamlessly across L2s, Ethereum L1, and centralized exchanges, expanding MEV opportunities across the ecosystem.

Partner With Us

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

If you are interested in collaborating, please contact our research team via X (@Hyunxukee) or follow us on (@radius_xyz).