Cross-Chain Searcher

Exploiting undercollateralized positions in lending protocols that span multiple chains. A searcher:

• Monitors loan-to-value (LTV) ratios on protocols like Aave V3 (deployed on multiple networks).
• When a position becomes eligible for liquidation on one chain, the searcher supplies the required capital on that chain.
• Claims the liquidation bonus, often funded by capital bridged at high speed from another chain to win the race.

Targeting inefficiencies in the minting and redemption processes of cross-chain bridges and wrapped assets.

• Mint/Redemption Arbitrage: Profiting from price differences between a bridged asset (e.g., USDC.e on Avalanche) and its canonical version on the native chain.
• Delay Exploitation: Some bridges have finality delays; searchers may front-run transactions once assets are confirmed on the source chain but before they are claimable on the destination chain.

Influencing or exploiting price feeds that are used across chains to trigger profitable trades.

• A large trade on a low-liquidity chain can skew a DEX's price, which is then reported by an oracle.
• Searchers can use this manipulated price to trigger limit orders or liquidations on other chains that rely on the same oracle data (e.g., Chainlink).
• This creates a risk of cross-chain contagion from MEV activity.

Providing large, temporary liquidity for a cross-chain swap to capture the entire liquidity provider fee.

• A searcher detects a large pending swap that would incur high slippage on the destination chain's DEX.
• They front-run the swap by adding a large amount of the required token to the pool.
• They immediately back-run the swap by removing their liquidity, keeping the fees. This often requires flash loans sourced from the destination chain.

A more complex, frontier strategy involving the ordering of transactions across multiple blockchains to create profitable outcomes.

• Involves correlated assets whose prices influence each other (e.g., staked ETH derivatives on different chains).
• A searcher might execute a series of trades on Chain A to move a price, then execute a pre-planned, profitable trade on Chain B that is contingent on that price movement.
• Requires pre-consensus access or extremely low latency to multiple chains' mempools.

The foundational requirement is operating synchronized, low-latency nodes for every target blockchain. This includes full nodes or archive nodes to access historical state and validator/relayer nodes for networks with specific bridging protocols. Maintaining this infrastructure ensures access to real-time mempools, block data, and the ability to submit transactions without third-party API delays.

Searchers must integrate with the messaging layers that facilitate cross-chain state transitions. Key protocols include:

• Inter-Blockchain Communication (IBC): For Cosmos SDK chains.
• Wormhole & LayerZero: Generic message-passing protocols.
• Chain-specific bridges: Like the Arbitrum and Optimism bridges for Ethereum L2s. The searcher's software must construct valid messages and often pay fees in the native gas token of the source chain.

Before broadcasting, every potential cross-chain bundle must be simulated locally to guarantee profitability and success. This requires:

• A forked environment of each chain's state.
• MEV-Boost compatibility for Ethereum, to access builder markets.
• Sandboxed execution to model complex, multi-step transactions across chains and estimate gas costs, slippage, and bridge latency.

A real-time system to detect opportunities, which are often time-sensitive arbitrage or liquidation events. This involves:

• Custom indexers tracking asset prices, liquidity pool reserves, and loan health across chains.
• Mempool surveillance for pending transactions that could create an opportunity.
• Alert triggers that launch the simulation and execution pipeline when predefined conditions are met.

To prevent frontrunning, successful cross-chain bundles must be submitted privately. Searchers use:

• Private RPC endpoints (e.g., Flashbots Protect, BloxRoute)
• Direct integration with block builders via secure channels.
• Encrypted mempools on supported chains. This ensures the profitable transaction sequence is not stolen before it can be included in a block across all involved chains.

Operating across chains necessitates holding native gas tokens (ETH, MATIC, AVAX, etc.) and bridgeable assets in multiple wallets. This requires:

• Hot wallet orchestration for speed, often with smart contract wallets for batch operations.
• Automated gas refueling strategies to ensure wallets never run out of the specific token needed to pay for transaction fees on a given chain.
• Risk management to limit exposure in any single wallet or chain.

A cross-chain searcher is a bot or automated agent that scans multiple blockchains for arbitrage, liquidations, or other MEV opportunities that span across them. Unlike single-chain searchers, their strategies depend on price or state discrepancies between different networks, often facilitated by bridges and cross-chain messaging protocols like LayerZero, Wormhole, or Axelar. They submit complex, multi-step transaction bundles designed to be executed in a specific sequence across chains to capture value.

This is the most common strategy, exploiting price differences for the same asset (e.g., ETH, USDC) on different chains. A searcher might:

• Identify that ETH is cheaper on Arbitrum than on Optimism.
• Bridge capital to Arbitrum (or use existing liquidity).
• Buy ETH on Arbitrum.
• Bridge the ETH to Optimism via a fast bridge.
• Sell it on Optimism at a higher price. The profit is the price difference minus all gas fees and bridge fees. This activity helps align prices across ecosystems.

Cross-chain searchers rely on a specialized stack:

• Cross-Chain Messaging (CCM): Protocols (LayerZero, CCIP) to trigger actions on a destination chain.
• Fast/Atomic Bridges: For moving assets with minimal latency and settlement risk.
• Searcher RPCs: High-performance node connections to multiple chains for low-latency data and transaction submission.
• Cross-Chain MEV-Boost: Emerging relay networks that allow searchers to bid for inclusion of their cross-chain bundles directly into blocks on multiple chains simultaneously.

The role introduces unique complexities:

• Temporal Risk: The multi-step, multi-chain process takes time. Prices can change between the first and last transaction, turning a profit into a loss (slippage).
• Bridge Settlement Risk: Some bridges have delay periods, during which arbitrage opportunities can vanish.
• Cross-Chain Reorgs: A blockchain reorganization on one chain in a multi-chain bundle can invalidate the entire strategy.
• High Capital Requirements: Strategies often require significant capital deployed across several chains to be profitable after fees.

Several protocols are building infrastructure specifically for this ecosystem:

• Succinct Labs: Develops Telepathy, enabling smart contracts to trustlessly read state from other chains, crucial for searchers.
• Across Protocol: Uses a unified auction model where searcvers can fulfill user bridge requests for a reward, creating a new MEV opportunity.
• Chainscore: Provides cross-chain intent infrastructure, where searchers compete to fulfill complex user requests that span multiple chains, creating a new design space for cross-chain strategies.

Cross-chain searchers play a dual role. Positively, they enhance market efficiency by arbitraging away price differences and provide liquidity for cross-chain actions. They are also becoming essential solvers in intent-based cross-chain systems. Negatively, they can contribute to network congestion and high gas fees on multiple chains during periods of high volatility. Their evolution is closely tied to the development of shared sequencers and unified settlement layers that could make cross-chain execution more atomic and less risky.

Searchers depend on cross-chain messaging protocols (e.g., LayerZero, Wormhole, Axelar) to relay data and assets. The security of their operations is directly tied to the underlying bridge's security model. Risks include:

• Validator Set Compromise: If a bridge's validator majority is malicious, they can forge fraudulent messages.
• Smart Contract Bugs: Exploits in the bridge's on-chain contracts can lead to fund loss.
• Data Availability Failures: If the source chain's state proofs are unavailable or incorrect, the searcher's cross-chain actions are invalid.

Cross-chain MEV introduces temporal and informational arbitrage between chains. Searchers must protect their strategies from:

• Cross-Chain Frontrunning: An adversary observes a pending transaction on Chain A (e.g., a large swap intent) and races to execute a related transaction on Chain B before the original searcher's cross-chain action completes.
• Oracle Manipulation: Searchers using price or data oracles are vulnerable to flash loan attacks or oracle latency exploits on one chain to create profitable, distorted conditions on another.

A searcher's strategy is only as valid as its view of the state on remote chains. This creates critical trust assumptions:

• Light Client / Node Reliability: Searchers relying on light clients or third-party RPCs for chain state must trust their correctness and liveness.
• Reorg Risks: A blockchain reorganization (reorg) on the source chain after a cross-chain message is sent can invalidate the premise of the searcher's action on the destination chain, potentially leaving them with stranded assets or bad debt.

The technical complexity of operating across chains amplifies operational risks:

• Multi-Chain Key Management: Searchers must manage private keys or transaction signing across multiple chains, increasing the attack surface for key leakage.
• Gas Management Failures: Miscalculating gas fees on a destination chain can cause transactions to revert, breaking atomicity in cross-chain bundles and leading to partial execution and losses.
• Infrastructure Dependence: Dependence on specific RPC providers, indexers, or mev-boost-like relays on each chain creates centralization and liveness risks.

Searchers interact with DeFi protocols on multiple chains, inheriting and connecting their risks:

• Composability Exploits: A cross-chain strategy that composes several protocols can be vulnerable to a logic bug in any single component, with cascading losses.
• Liquidity Fragmentation: Executing large trades across chains relies on sufficient liquidity in destination pools; slippage and impermanent loss dynamics are compounded.
• Governance Attacks: A malicious actor could use cross-chain messaging to influence protocol governance on a remote chain to change parameters adversely affecting searchers.

Operating across sovereign blockchain networks and legal jurisdictions creates non-technical risks:

• Compliance Complexity: A searcher's activities may touch regulated financial activities (e.g., trading, lending) in multiple jurisdictions simultaneously, creating significant compliance overhead and legal uncertainty.
• Censorship Resistance Conflicts: A searcher may be forced to comply with a regulatory action on one chain (e.g., OFAC sanctions) that conflicts with the censorship-resistant principles of another chain in their workflow.