Crypto arbitrage bot nets $3 after $200m flash loan

The arbitrage trading bot used flash loan of $200 million to execute a series of transactions, earning a profit of $3.24.

This transaction was performed by an arbitrage bot that used Flashloans in order to supply the capital for its transaction.

The reason that the DAI amount is so high is due to MakerDAO’s ‘DssFlash’ contract, which allows zero-fee borrowing on any amount of DAI. pic.twitter.com/zwlM2iahAx

— Arkham (@ArkhamIntel) June 14, 2023

Analysts at Arkham Intelligence noted that the bot usedMakerDAO. The DAI borrowing limit was capped at ~$500 million. No fee was charged.

The bot subsequently deposited assets on Aave V2, borrowing about 2350 WETH. The ‘Wrapped Ether’ was subsequently used to purchase Threshold Network (T) on the Curve platform.

After finishing the arbitrage cycle, the bot sold the tokens on the Balancer DeFi platform, earning 0.019 ETH (~$33). Transaction costs and the gas fee for the block producer reduced net profit to $3.24.

According to Zachary Lerangis, head of operations analytics at The Block, such bots implement any strategy, even if the financial result is modest.

Although the bot had access to $200 million in DAI, it did not fully deploy the funds due to liquidity constraints or price differences, explained the specialist.

Back in March 2023, a hacker attacked the Deus Finance DAO and earned about $3 million. The breach occurred due to oracle manipulation; such high profits stem from the use of a flash loan.