The mechanism for finding arbitrage deals is as follows.
The DEFiBot neural network tracks all liquidity pools on decentralized exchanges within the selected blockchain in real time via smart contracts. Before entering the blockchain, the transaction goes to the mempool and already at this stage the DEFiBot analyzes and predicts the price change of the trading pair. If the transaction is big, it will change the price of the token by changing the proportions in the smart contract's liquidity pool on a concrete decentralized exchange. On other exchanges, the price hasn't changed yet. But it will begin to change as soon as the transaction enters the blockchain and becomes available for analysis by traders.
The arbitrage window is the time from when the price of a token changes on one exchange until the price of the token aligns on other exchanges. This time can be as little as 5 minutes or as long as several hours. Depending on the popularity of a certain token and the size of the liquidity pool.
With large coins, the arbitrage window closes very quickly, as arbitrage traders work on such coins. Small pools are not as interesting, because manual transactions are too time-consuming. But due to automation, with the help of DEFiBot these deals are made instantly. Allowing you to maximize profits from each arbitrage window. Which is not available to arbitrage traders who trade manually.
DEFiBot works directly with smart contracts and does not use the public interface of decentralized exchanges. That allows you to make transactions much faster, not to make mistakes with transactions fees. And outperform single traders and teams of professional traders in terms of speed and final profit.
When the arbitration window closes, all tokens are automatically converted into the selected main asset, closing the transaction and fixing the profit. And you get a report in the telegram bot.
Arbitrage trading is legit. It's not hacking into an exchange, it's not using vulnerabilities in smart contracts. It is automatic algorithmic trading, which differs from manual trades by the speed of decision-making and multithreading.
The choice of the major asset determines in which token the DEFiBot will complete the arbitrage trading cycle and which asset will grow.
The best way to arbitrage is to choose the network's main token, which will reduce transaction fees within the blockchain. And most trading pairs in liquidity pools are tied to the main blockchain cryptocurrency. Although the value of the asset can change dramatically from the mood of the crypto market, unlike Stable Coins. The choice is yours.
Limited - the DEFiBot operates only with the initial capital. All profits are withdrawn to the specified wallet. Progressive - profits are reinvested. Withdrawal of profits is made in manual mode.
The greater the arbitrage capital, the greater the profit. There is a direct correlation. That is why we recommend using the Progressive strategy.
Working capital limits
You can set limits on the working capital. The bot will make transactions according to these limits. But the bigger it is, the higher the profit. Take into consideration that there must be enough funds on your active wallet.
You can limit the arbitrage capital that can be used to make arbitrage trades. That is, the DEFiBot will only use a portion of the available arbitrage capital. The rest will remain unmoved in your arbitrage wallet. You may need this if you are making manual adjustments to arbitrage trades, through manual trading. If, for example, you need to increase the size of a certain trade by copying the actions of DEFiBot.
DEFiBot`s work cycle
Define periods for readjusting the bot and receiving reports.
At the end of the cycle, all tokens are converted to the main asset. And you get a detailed report. At the end of the arbitrage cycle, you can reconfigure the bot and the new settings will take effect immediately.
Min liquidity pool
The pool of liquidity on the trading pair, the smaller it is, the higher the profit per transaction in percentage terms, but the smaller the transaction amount. If you have small capital, it's better to work on small pools.
Arbitrage trading on bigger pools requires a bigger arbitrage capital
Arbitrage yield per trade(%).
Arbitrage yield per trade(%). The higher the value, the harder it is to find a deal, but the higher the one-time profit. ( up to 15% with MAX license) Deals with a high profit percentage are less common. Choosing the maximum high profit per trade will significantly reduce the number of matching trades. To work on the Ethereum blockchain, it is recommended not to set a minimum profit percentage, due to high transaction fees.
Liquidity pool age
The greater the age of the pair, the safer it is. The chance of ragpool decreases.
For conservative arbitrage trading with the lowest risk, it is better to choose older liquidity pools. We carefully analyze and select arbitrage pairs that we add to our white list. But the most unexpected can happen on the crypto market. Everyone remembers the case of Terra Luna. That's why there cannot be a 100% guarantee.
WhiteList tokens only
DEFiBot trades only Whitelist tokens. This is the most reliable and conservative strategy. You can manually expand the Whitelist by adding your own tokens to it.
Exclude Deflationary Tokens
Deflationary tokens carry higher risks. And they are a very uncomfortable object for arbitrage trading. You can disable this option in the settings. But we strongly recommend not to do it. Only if you have precise experience and knowledge of how to trade such tokens.
Wallet to withdraw profits.
Profits are automatically withdrawn to the additional wallet you specify. This function works only if a Limited strategy is selected. If a Progressive strategy is selected, all profits are reinvested.
We recommend to withdraw once a week or manually. Withdrawal in automatic mode works only if you selected Limited strategy.
Documentation will be coming soon.
The Whitelists are compiled by the DEFiBot's team, after examination of each asset.
New tokens are included in the whitelists after careful research.
You can check if the token you are interested in is on our list.
You can propose a new token to be added to the total whitelist yourself.
Or create personalized whitelists in the user settings.