Atomic Arbitrage
Atomic arbitrage is a risk-free trade that exploits a price discrepancy between two or more venues within a single transaction, using a flash loan if the searcher lacks the upfront capital. The word 'atomic' means the entire sequence — borrow, buy on venue A, sell on venue B, repay loan — either fully executes or fully reverts, eliminating execution risk. Atomic arbitrageurs keep on-chain prices synchronized across DEXs; their activity ensures that no AMM drifts far from the aggregate market price. This is the most benign form of MEV because it provides a genuine service (price discovery and market efficiency) and does not harm any individual trader. The ongoing question is whether the value captured by atomic arbitrageurs should flow to the arbitrageur or to the liquidity providers who create the price discrepancy in the first place. Oracle-based AMMs and batch auction DEXs internalize arbitrage profits back to LPs.