Arbitrage, Xiao Xiong privately thinks is the most awesome operation in the financial world: as soon as the computer is turned on, the quantitative robot starts to move bricks with "risk-free arbitrage", while humans only need to sit and count money. It is cool to think about it.
Today I will share a true story of mine. This boss made over a million dollars from the LayerZero project through arbitrage.
"The Fat Penguin's Coffers Are Empty"
In June of this year, there was a big boss with the wallet address 0xbbef86c9ec2c33ede24909eea6b91d08f728d924. He discovered the bug of LayerZero’s cross-chain liquidity pool and immediately mobilized 13 million US dollars to start performing arbitrage money printing magic.
He first added liquidity to a Stargate chain, and then removed the pool instantly. Using Stargate's dynamic balancing rules, he quickly crossed chains within a block and obtained a balance reward of 1,000+ US dollars in a single time.
Once every 5 minutes, 24 hours of non-stop wool harvesting
The happiness of rich people is so unpretentious and boring...
A few days later, this piece of fat was discovered by a few people on the chain. Everyone joined the army to destroy the Fat Penguin vault, and the single cross-chain reward became less and less.
Later, Stargate issued an emergency voting proposal and canceled the “cross-chain balance reward” overnight. Many people may have voted, but they didn’t know the wonderful story behind it.
I have been holding back this story for a long time, and today I share it with you. The world’s “most secure” cross-chain protocol has also been stolen from millions of dollars.
To this day, L0 does not admit that their dynamic balance reward has a design flaw... If there is no bug, why would you vote to abolish it overnight?
So, brothers, as long as the rules are designed by humans, there must be bugs. Are you confident that you can seize an arbitrage opportunity and make millions?
========== Dividing line ==========
Let’s take a serious look at what arbitrage is? #LearnwithCIAN
Arbitrage involves profiting from price differences in different markets for the same asset. Traders buy in markets where an asset is cheaper and sell in markets where it is more expensive, making a profit from the price difference. This practice is common in the stock market and is equally prevalent in the cryptocurrency market and DeFi.
为什么DeFi中可能出现套利机会?
1. 去中心化：与传统金融不同,DeFi运行在去中心化网络,主要是区块链技术。这种设置允许更透明和访问更便利的套利机会。
2. Asset types: DeFi platforms host various cryptocurrencies and tokens, and the price of each token may be different on different exchanges.
3. High price volatility: Cryptocurrencies are known for their high volatility, which often results in price differences for the same asset on different platforms
DeFi中的套利机制
1. 识别套利机会：套利者使用工具和算法来监控同一资产在不同DeFi平台 (如Uniswap、SushiSwap或Curve) 上的价格差异
2. Execute trades quickly: Successful arbitrage requires speed because price differences disappear quickly. Automated trading bots are often used to execute these trades quickly.
DeFi中套利的类型
1. 简单套利：在不同交易所买入和卖出同一资产
2. 三角套利：这涉及在一个或多个平台上交易三种不同加密货币的序列，以利用价格差异获利
3. 统计套利：使用数学模型识别一段时间内的套利机会
This knowledge point is provided by @CIAN_protocol Defi Classroom
========== Dividing line ==========
区块链遍地是黄金
只要有心就能赚钱
兄弟们，加油干吧
Complete text
