In a recent crypto trading endeavor, a bot made various complex moves using Ethereum blockchain, including taking a $200 million flash loan, all for a mere $3.24 profit. The transaction was made by an arbitrage bot that uses flash loans and managed to secure a small income after paying transaction fees and sending an additional amount to the block builder.
The strategy behind this move hinged on the fact that MakerDAO‘s “DssFlash” contract allows zero-fee borrowing on any amount of DAI, which can go up to a limit of $500 million. This encouraged the bot to take uncollateralized loans as long as the assets loaned would be paid within the same block.
It started by borrowing 200 million DAI from the decentralized finance (DeFi) protocol MakerDAO and then supplied the funds to the AAVE DAI Market. Subsequently, 1.349 Wrapped Ether (WETH) was borrowed against the funds, which were then utilized to purchase Threshold Network (T) tokens on the Curve exchange and sold at the liquidity protocol Balancer. Through these transactions, the bot obtained a total of 0.019 Ether, valued at around $33 at that moment, though the transaction fees for the trade were about $28.76. After paying these fees and the additional payment to the block builder, the bot only had $3.24 left as profit.
While the risk might have seemed high compared to the gained amount, some individuals in the community applauded the bot, stating that “profit is profit.” On the other hand, a skeptic might feel that doing all this for a tiny profit signifies the adverse condition of the bear market. However, it’s worth noting that not all bots work on low-profit trades; some manage to secure more than $1 million by using sandwich attacks on memecoin traders.
At the end of the day, the success of such strategies depends on the prevailing market conditions and the effectiveness of the bot’s programming. In some cases, even a small profit may be considered a win if the risk and investment were minimal. On the contrary, if the bot had incurred a loss, it would have sparked a debate on whether taking such significant loans for the sake of a seemingly small gain is worth the effort and risk involved. Nonetheless, it appears that the relentless pursuit of profit, no matter how small, continues to thrive in the world of crypto trading.
Source: Cointelegraph
