💱Arbitrage
Understanding Arbitrage
Arbitrage involves taking advantage of price differences between two or more markets to earn a profit. Imagine buying a bottle of water for $1 in one market and selling it for $2 in another. This simple transaction results in a profit of $1.
Arbitrage in Action
Let's look at a straightforward example:
You start with 200 USDC.
You buy 1 SOL on Market1 for 200 USDC.
You sell the 1 SOL on Market2 for 205 USDC.
In this scenario, you've made a profit of 5 USDC.
Solana's Market Landscape
On Solana, there are several markets facilitated by various market makers, including:
Raydium
Meteora DLMM
Phoenix
Orca
And others
To efficiently access these trades, we utilize Jupiter’s routing system, which provides the best price for each token by potentially routing through multiple markets.
On-Chain Example
Here's an example of an on-chain arbitrage trade executed by our bot in version 2:
The bot started with 414 USDC.
It executed a trade that resulted in receiving 449 USDC.
This trade yielded a profit of over 30 USDC!
For a detailed explanation of the on-chain system, please refer to the HARBR reference.
About the ARB Protocol
The ARB Protocol on Solana enhances the arbitrage process by automating the discovery and execution of atomic swap arbitrage opportunities across all decentralized exchanges (DEXs). This protocol aims to attract new users to crypto and DeFi, facilitate community-driven DeFi, and promote easy access to sustainable DeFi yields. By leveraging the ARB Protocol, users can seamlessly engage in profitable arbitrage trading with minimal manual intervention, optimizing their trading strategies and maximizing their returns.
How ARB Protocol Works
The ARB Protocol leverages the Jupiter aggregator, which scans multiple decentralized exchanges on Solana to find the best prices for tokens. By identifying small price differences across various markets, the protocol can execute numerous trades efficiently. This allows users to capitalize on even the smallest price discrepancies, maximizing their profits through automation and strategic routing.
By using the ARB Protocol, you can automate your trading strategies, reduce the need for constant manual monitoring, and take full advantage of the dynamic market environment on Solana. This makes arbitrage trading more accessible and profitable, even for those new to the DeFi space.
Last updated
