In an impressive display of execution, an arbitrage bot successfully carried out a series of intricate transactions within the Ethereum network. One of its notable achievements was obtaining an instant credit worth a staggering $200 million, resulting in a profit of $3.24. Instant credits offer a streamlined approach to lending, provided that the borrowed assets are repaid within the same transaction block. Should the repayment extend beyond the block, the network remains unaffected. To accomplish this feat, the arbitrage bot took advantage of a flash credit mechanism, acquiring the substantial sum in DAI stablecoins from MakerDAO by leveraging the power of the “DssFlash” contract. This groundbreaking contract enables borrowers to access loans with zero fees, offering an impressive borrowing limit of up to $500 million.
Zakhar Loranjić, the Head of Operations at Arkham, shed light on the bot’s modus operandi, explaining that these automated systems execute transactions purely based on their ability to generate profit, regardless of whether the net gain seems relatively insignificant. The underlying principle of arbitrage lies in identifying price disparities for the same asset across different markets. Traders, or in this particular case, bots, are adept at capitalizing on these variations to maximize their gains. After securing the instant credit, the bot promptly deposited the funds into the decentralized credit platform known as Aave. Subsequently, it utilized a relatively modest sum of $2,300 in Wrapped Ether (WETH) as collateral to borrow funds. WETH, an ERC-20 token equivalent to Ethereum in value and usable within smart contracts, played a pivotal role in the bot’s strategic move to purchase Threshold Network (T) tokens on the Curve exchange. The successful completion of the arbitrage cycle culminated in the bot selling the Threshold Network tokens on the Balancer exchange, reaping a profitable return of approximately 0.019 ETH, equivalent to around $33. However, it is important to note that the overall net profit was significantly impacted by transaction costs and a $1 fee imposed by Ethereum block miners, ultimately resulting in a final profit of $3.24.
