Kestrel: Yield-Bearing Stablecoin MEV Arbitrage

Kestrel is a multi-chain MEV searcher targeting discrepancies between secondary market DEX pool prices and the deterministic on-chain ERC-4626 redemption values of yield-bearing assets (sUSDS, sDAI, sUSDe, sxDAI).

Multi-Chain Strategy Matrix

• Cross-Chain Deployment: Operates across Ethereum Mainnet, Arbitrum One, and Gnosis Chain.
• Five Specialized Strategies:
• MakerDAO flash-mint redemption arbitrage.
• sUSDe cross-venue spread capture.
• ERC-4626 vault deposit/redemption rate parity backruns.
• Sky Savings Rate dynamic threshold execution.
• Whale-trade mempool detection with pre-computed optimal flash sizes.

Core Technical Features

• Local REVM Simulation: Every identified arb opportunity is evaluated through an in-memory forked REVM state machine within a 50ms deadline prior to bundle construction.
• Bisection Size Optimization: Golden-section and bisection numerical optimization to calculate mathematically optimal borrow sizes balancing fee drag against pool price impact.
• Multi-Builder Relays: Real-time bundle broadcasting to major block builders with dynamic gas-ceiling kill switches and an embedded SQLite P&L audit ledger.
• Contract Security: Solidity execution contracts incorporate Uniswap V4 hook compatibility and a 24-hour timelock controller on administrative functions.