Mempool Competition

Mempool competition refers to the struggle between participants to have their transactions included in the next block, often by paying higher gas fees. In the context of liquidation, this is a fierce environment where liquidators compete to be the first to trigger a liquidation and claim the bounty.

This competition can lead to "priority gas auctions," where participants bid up fees to ensure their transaction is prioritized. While this ensures that liquidations are executed quickly, it can also lead to increased costs for users and potential network congestion.

Understanding mempool dynamics is essential for designing fair and efficient liquidation mechanisms. It is a key aspect of market microstructure in decentralized systems, reflecting the competitive nature of on-chain activity.

Participants must strategically manage their transaction submissions to navigate this environment successfully.