Original Title: "GMGN's P Young Master's Small Classroom - Gas, Priority Fee, Slippage, MEV"

Original author: Haze, co-founder of gmgn

When trading on the chain, many basic concepts may determine the success or failure of your trades.

Now trading tools are trying to reduce the threshold for everyone's operation. Most people do not understand the on-chain parameters. This article will help you understand them.

Some Basic Concepts:

· Gas Fee (GAS)

· Gas = Transaction fee of the blockchain

· Pay miners / validators to process your transactions

· Gas high → Priority packaging for trading

· Low gas → May be stuck in the queue

Payment Method:

· SOL Trading → Pay SOL

· ETH Trading → Pay ETH

· Different chains have different gas mechanisms

Slippage（Slippage）

Slippage = deviation between expected price and actual execution price

Causes of Slippage:

· Market depth insufficient → Large order size, but pool liquidity insufficient

• Transaction delay → The time from submission to execution, price fluctuation

· MEV sandwich attack → Robot price manipulation arbitrage

Example:

You buy ETH with 1000 USDC, expecting a transaction price of 2000 USDC/ETH, and should receive 0.5 ETH.

However, the execution price becomes 2050 USDC/ETH, and you ultimately receive 0.4878 ETH, your Slippage = 2.5%.

If your Slippage setting is 0.1%, the trade will fail directly because the Slippage is insufficient.

How does the sandwich attack (MEV Sandwich Attack) sandwich you?

Principle of sandwich attack:

· Front-run → Robots buy in front of you, pushing up prices

• Your trade execution → You can only execute at a higher price, incurring Slippage loss

· Back-run → The robot sells arbitrage immediately

Impact:

· Your buying price is raised, and the trading cost increases

· The robot arbitrage your Slippage, letting you buy high and sell low

Clamp on Solana vs Eth

· ETH → Clamp accurately inserted

· SOL → MEV robot batch submits orders, wide netting and clipping

How to prevent sandwich attack?

Enable MEV protection to reduce the likelihood of transaction monitoring

· Priority Fee, also known as bribery

· Priority fee = The tip you give to miners / validators to make transactions execute faster

Components:

· Base Fee→ Network Base Fee (Solana is fixed Fee, ETH is dynamic)

· Priority Fee（优先费）→ The extra fee you pay to increase the priority of the transaction

Purpose:

Increase the priority of transaction packaging to get transactions on chain faster. In MEV competition, high priority fee transactions will be executed first.

Summary

On-chain transaction Gas fee + Slippage (including the Slippage atmosphere you set and the impact of your purchase amount on the pool) + MEV sandwich collectively determine the final transaction cost.

Case Study:

Many people are rushing to trade on Solana, using 50% Slippage + MEV protection for Dogecoin. Is it safe?

· Earth dogs are mostly AMM transactions

· You buy a certain token with 1000 USDC, Slippage 50%, Slippage allows extreme price execution.

· MEV robots buy first to drive up prices (within your Slippage tolerance)

· Your transaction was executed at a high price, and you received fewer tokens than expected

· MEV robots sell immediately for arbitrage, earning your Slippage losses.

If MEV protection is enabled:

· Trading will not be precisely sandwiched (robots cannot place orders before and after).

The pool has sufficient liquidity, so the purchase amount will not impact the price, and the transaction will be executed normally.

If not effective:

· Solana does not have a private Mempool, MEV bots can still see your transactions and frontrun you

If your amount impacts the pool:

· High Slippage = Allowing extreme price changes, market fluctuations may lead to losses

· Low liquidity pool = greater trading impact, easier to slip

How to avoid being sandwiched?

· Do not use high Slippage, set Slippage range sensibly

· If using AMM, enable MEV protection to reduce the risk of being monitored

Is high Slippage a key factor in determining the success rate of Dogecoin transactions?

Most of the Shiba Inu's short-term volatility is not that high, and the overflow Slippage range will not have any additional success rate effect.

It's still mainly your priority fee + your trading node + trading route pool selection and other factors. These can continuously improve your trading success rate. Slippage is just an option in some extreme cases. Most of the time, 10% - 20% slippage is sufficient. This part can be manually adjusted multiple times during trading to control risks.

For P rookies, it's all about taking small risks. With a small amount of purchase and adjusting the Slippage a bit, most cases of being sandwiched can be avoided.

Conclusion

When the trading venue is AMM (Raydium), the Slippage parameter determines the probability of being sandwiched by MEV.

If you set a high Slippage, you need to evaluate:

· Ensure that the Gas fee is high enough to prevent MEV bots from front-running

· Is the purchase amount large enough to make MEV bots profitable

· If the liquidity pool is not deep enough, it may eat up the Slippage range

· By trading in small batches + reducing Slippage, the risk of being sandwiched and losses in small pools can be greatly reduced.

What is the Slippage? How is small trading defined?

It's like you have to hit more dogs to feel it! Just like driving, manual transmission depends on practice!

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