How Does Transaction Latency Affect the Profitability of AMM Arbitrage?

Transaction latency, the time between a trade being submitted and confirmed on the blockchain, is a critical factor. High latency allows other arbitrageurs to spot and execute the trade first, leading to "front-running" or simply the opportunity disappearing.

In a highly competitive environment, only the fastest transactions, often those paying higher gas fees, will successfully capture the profit. Lower latency increases the chance of a successful and profitable execution.