Unconventional Business Model: Making $200 Million into $3
An arbitrage bot employed MakerDAO’s ‘DssFlash’ contract to execute a flash loan of $200 million, resulting in a modest profit of $3.24.
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The bot utilized Flashloans, taking advantage of zero-fee borrowing offered by MakerDAO's flexible ‘DssFlash' contract, which currently allows borrowing up to $500 million DAI.
By leveraging Flashloans, the bot eliminated the need to hold its own capital and executed transactions using borrowed funds. In this case, it borrowed 200 million DAI from MakerDAO and supplied it to the AAVE DAI Market.
Subsequently, it borrowed $2.35K worth of WETH using the supplied DAI.
The acquired WETH was used for a series of profitable trades. The bot bought Threshold Network (T) on Curve and sold it on Balancer, resulting in a total profit of 0.019 ETH ($33).
However, it's important to consider that transaction fees totaling $28.76 offset the profit.
Additionally, a $1 fee was sent to the block builder. After deducting these expenses, the bot's final net profit amounted to $3.24.
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