Infy

Infy

06-08-2022

13:43

How I turned $1500 into $17,862 in under 17 hours arbitraging cryptocurrencies. Here’s a quick guide so you can do it too. (Case study included) 🧵

1/ Scenario LUNA’s crash in May 2022 set off a wave of panic across the market. In the days that followed, the pricing of $LUNA and $UST fluctuated wildly across multiple chains and exchanges. In that chaos, there were multiple opportunities. Here’s one of them:

2/ Opportunity $UST prices were mismatched across BSC, Avalanche, Fantom and Polygon. There was a difference of 5-15% as people panic sold their $UST. How do you take advantage of this? You buy on one chain at a lower price, send it cross chain to sell at a higher price.

3/ Why would this work? 3 reasons: 1) Panic -- Fear causes panic selling. 2) Single chain users -- Not everyone knows or is comfortable going cross chain. 3) Limited bot activity -- The speed of $UST crash was unexpected.

4/ Speed. Executing trades with speed is key. Tips: • Have $UST charts for all 4 chains on a screen • Have a multichain swap like @FinanceFirebird ready. •Have the multichain bridge ready for transfer. • Use 1 min chart

5/ Window of opportunity This window can be hours, days or weeks. Window for chaos arbs tends to be hours or days. Window for small cap projects tends to be days to weeks. Sacrifice sleep and social life if you want to maximize profit as there is time limit.

6/ Cashflow Always have stablecoins available to buy discounts. Once you have made a profitable trade, bridge the stables back to the original chain. Keep the money circulating quickly so you never miss out on pricing mismatches. Pro tip: Have stables on all 4 chains.

7/ Execution How is this done? 1. Identify a mismatch on the 1min chart. 2. Buy $UST. 3. Send it across to another chain with a higher price. 4. Sell $UST for stables. 5. Send stables back to original chain to buy more $UST. 6. Repeat until price returns to even.

8/ Rules So how do you not get rekt doing this ? Follow these rules: • Do not swap amounts that have price impact >1% • Do not hold too much inventory ( $UST ) on hand • Always have SOME inventory to sell price pumps • Set aside 50% of profits and compound other 50%.

9/ Here is an example how to identify a mismatch:

10/ Here is the execution of a winning trade:

11/ If you want to arbitrage cross chain for massive profits: 1. Identify price mismatch 2. Execute with speed 3. Go hard in the window of opportunity 4. Manage your cashflow 5. Profit take and compound at 50/50 ratio Bonus tip: There is opportunity in chaos.

Enjoyed this thread and found it valuable? Retweet the first post and share it with a friend. This is part 1 of a 3 part series on arbitraging cryptocurrencies. If you would like to learn more, follow me at @omgitsinfy and turn on notifications.

EDIT for transparency: After double checking all the transactions from 2 months back. I started arbing with 10k UST (worth about $6.8k at that time) and ended up with ~$17k net profit. So the starting capital should have been $6,800>$23,800. I apologize for the error.



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