Why Is Fast Execution Critical for Profitable Arbitrage in DeFi?

Fast execution is critical because arbitrage opportunities in DeFi, which are often caused by temporary price deviations, are quickly spotted and exploited by competing bots. The first bot to have its transaction confirmed by a validator will capture the profit.

This competition leads to a "gas war," where bots bid up transaction fees to incentivize validators to prioritize their transactions. The speed of execution, often measured in milliseconds, is the difference between profit and a failed, costly transaction.