Introduction
Crypto Arbitrage is a process through which you can make much money by swapping crypto coins
Let that blow your mind for a while
Swapping
There are crypto exchange platforms like Uniswap, Sushiswap where you can swap cryptos. Let's say you have a METAMASK account with 1 ETH in it. Now, if you swap 1ETH with Dai you might get 2200 DAI. So this is what swapping is, exchange of tokens.
How is it related to profit
The amount of DAI you get for 1 ETH is different for each platforms. For example if you get 2200 DAI for 1 ETH in Uniswap, then 1 ETH might be equivalent to 2000 DAI in Sushiswap.
The Profit
Now, you have 1 ETH in your account, you go to Uniswap where 1ETH is equivalent to 2200 DAI. So, you have 2200 DAI in your account now.
Then you go to SushiSwap where 1 ETH is equivalent to 2000 DAI. You exchange 2000 DAI from your account for 1 ETH and still you are left with 200 DAI. That's your free profit.
What do you need
To start this arbitrage and earn:
- Capital: You need some tokes in your wallet to do this
- Knowledge: You need to know how much you are getting for the tokens in you have in different websites ## Automation Now there is a way to do this arbitrage automatically even if you don't have any capital.
You can make a smart contract and a node server to do this. Here's how it will work.
Smart Contract
- Take a flash loan
- Swap the flash loans in one Exchange where you get more of you preferred tokens
- Again swap the tokens in other exchange where its price is low
- Send the tokens widrawn from the Flash Loan and keep the rest
Node Server
Check the price of tokens in exchanges and according to that execute smart contract events.
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