Knowledge Base

# How to Price A Bid

Learn how to find the sweet spot for competitive bids.

Pricing a preconfirmation bid requires balancing several factors to optimize your chances of inclusion without overpaying. The formula developed by our research team takes into account:

- Time you’re submitting the transaction, t
- Time at end of slot, T
- The amount of discretion based on how you prioritize your priority fee. Tweak it to understand how much to bid.
- The state contention factor. Factor in how much the extractable value is for the mev opportunity.
- The bidder margin, how much you think you can pocket if it goes through. Your target margin should be determined based on your risk tolerance and the potential value of the transaction.

**pF _{t} * M_{(t,T)} + ασ_{(t,T)} = P_{bid}**

P | price |

pF | priority fee |

t | current time |

T | time at end of slot |

σ | cost of state |

α | 1 - bidder margin |

M | multiplier |

Adjust your bid based on real-time commitments from providers. Start with conservative estimates and tweak as you learn the market. The goal is to find the sweet spot where your bid is competitive enough for inclusion, but not higher than necessary.