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Crypto bot borrows $200M in a flash loan to secure just $3 of profit
- squarefoot 3y agoDoes the profit include the energy costs too?
- tanseydavid 3y agoSeems like the financial version of hydraulic fracking.
- jondiggsit 3y agoCrypto bot apologies for nothing!
- ftxbro 3y agocrypto bot has to get its bag too, keep hustling king
- bombcar 3y agoThose pennies in front of that steamroller ain’t gonna pick themselves up.
- nocoiner 3y agoClearly the pennies couldn’t have been real or someone would have picked them up before crypto bot got to them.
- lxgr 3y agoReal arbitrage opportunities definitely do exist in all kinds of markets – or what do you think traditional finance HFTs do all day? This is the same thing, just in crypto.
- thelastparadise 3y agoThere are pennies, but the steamroller is not extant.
- deleted 3y ago[deleted]
- throwaway9274 3y agoCrypto was a remarkably clever way to trick rich people into funding GPUs and legions of software devs. But there’s real work to do now.
- x-complexity 3y ago> Crypto was a remarkably clever way to trick rich people into funding GPUs and legions of software devs. 1) The usage of GPUs for compute is much more preferred to the ASIC-ification of certain computing workloads, as the hardware can be reused for better software / algorithms. 2) (Refer to below for personal views on effort prescriptivism.) > But there’s real work to do now. Heavily dislike the authoritarian-leaning connotations that anything other than "real work" is a waste of effort. People are allowed to use their time & effort to do whatever they want to do.
- tcfhgj 3y ago> People are allowed to use their time & effort to do whatever they want to do. They are. If that's a good thing remains to be debated, given there are many urgent problems in the world to be solved.
- x-complexity 3y ago> > People are allowed to use their time & effort to do whatever they want to do. > They are. If that's a good thing remains to be debated, given there are many urgent problems in the world to be solved. It is a good thing: Personal autonomy is a necessary right. When left alone, a person must be able to perform activities that they want to do. The binary alternative is no personal autonomy, to which this conversation alone would be forbidden and we would be put to death, as it subtracts from the total efforts of "solving necessary problems". No other discrete or continuous values in between these two extremes can exist in terms of individual personal autonomy, as an atomic action can either be performed or cannot be performed by an individual, with any "half-steps" equivalent to non-performance of such an action. Personal autonomy is necessary.
- ShamelessC 3y ago
- aleksiy123 3y agoThe whole thing is atomic right? Who cares what the amount is if it's guaranteed to be paid back or the transaction doesn't go through. Profit is profit.
- thelastparadise 3y ago> The whole thing is atomic right? Yes, by definition flash loans are atomic. It's money borrowed and repaid within one transaction, which is atomic. One might wonder: is anything being borrowed at all?
- nocoiner 3y agoI mean, there has to be actual capital at risk somewhere in this transaction, right? Something can’t come from nothing. Otherwise, someone could keep running this trade on repeat until they’ve accumulated an amount equal to the gross product of the universe.
- lxgr 3y ago> I mean, there has to be actual capital at risk somewhere in this transaction, right? No, since all component operations to a given transaction happen atomically, there really is no counterparty risk: Either the proposing actor manages to make a profit and "pay back" the flash loan (plus interest, apparently), or the entire deal does not go through. > Otherwise, someone could keep running this trade on repeat until they’ve accumulated an amount equal to the gross product of the universe. No, they can keep on repeating the trade (which is usually arbitrage of some sorts) exactly until the arbitrage opportunity is gone, which usually is quite soon – unless somebody has made a serious pricing mistake somewhere. > Something can’t come from nothing. It (i.e. arbitrage profit) doesn't come from nothing – it comes from seeing a market inefficiency and a way to profit from it. The actor that sees it is rewarded by profit; the entire market (i.e. all of its participants) benefits from better price quality. None of this is a crypto innovation either: This is exactly how traditional finance/payments multi-currency net settlement works.
- hourago 3y agoThe economy makes no sense anymore. Add a fee to all financial transactions or financial transactions will eat the economy.
- superchroma 3y agoThe fees exist. Crypto handling fees are not small. The market is so inflated that this nonsense happens regardless. Bitcoin doesn't have any more stability despite having ferocious transactions economics.
- dagw 3y agoThere are fees. The $3 in this case was the profit left over for the trader after all fees where paid.
- puma_ambit 3y agoEver since FTX, there’s no way that crypto is recovering in the United States. The public perception is completely ruined. It’s only a matter of time before all these services shut down.
- MuffinFlavored 3y agoWhy is BTC/USD still $25k then?
- puma_ambit 3y agoPeople are still holding on with the hope that it’s going to rebound, after something that high profile it’s been tainted and it’s more associated now with scams. When the ”every day person” can’t find a use for it in their daily lives, there isn’t much value for it to grow beyond a specific subset of users, and that’s what FTX was trying to do, but ultimately failed at.
- MuffinFlavored 3y ago> People are still holding on with the hope that it’s going to rebound How many people? How much are they holding? Bitcoin's market cap is $485b. That's a whole lot of people and a whole lot of hope.
- bavell 3y agoBitcoin has way more baggage than FTX. I didn't even know they existed till they collapsed and I've been following BTC since 2014 haha. We've been hearing these same arguments since the beginning... If nothing else Bitcoin has shown impressive sticking power, given all of its stumbles and uphill battles.
- itairal 3y agoThe network of belief people have in this is quite impressive even if I think they are fools. Still though, in the grand scheme of things crypto just hasn't been around that long. MSFT is so close to taking out its old high while crypto is all 2X away from the old highs. Over time, crypto is not going to be able to compete with stocks of cash producing businesses. Crypto fools have mostly confused commodity investing with stock investing and not understanding that the upward drift of the stock market is from the cash produced from business. Gold and silver looked like pretty genius long term holds in 1981 from being able to hold them again in 1974 but gold bugs paid an absolutely enormous opportunity cost over time. The worst part to me for crypto fools is that because the anti-crypto people have a narrative that the price is going to zero, their false beliefs are reinforced when this doesn't happen and won't happen. The risk is not going to zero, it is the risk of trading ranges forever like gold and eating massive opportunity cost.
- crtified 3y agoCrypto exchanges basically are giant bots, based upon massive technical investment over many years, whose purpose is to stay at the cutting-edge of manipulating billions in customer funds in such a way that their own profit is paramount.
- alphanullmeric 3y agoThis was a decentralized exchange. If you chose to run an open source program on your computer, you aren’t being manipulated. Hardest part about business is minding your own. Concern yourself less with what other people do with their own money.
- crtified 3y agoYou may have read my use of the term manipulate as cynical. In fact I meant it neutrally - that is, exchanges manipulate (or, "enable actions upon") money in the same way that computer applications manipulate data. Nothing inherently good or bad about it. Totally dependent upon the parameters. I don't think this story "Crypto bot borrows $200M to make $3" is particularly salacious, simply because even in it's seeming extreme, it's still a fairly mundane matter of shifting figures around. And matters of risk or custody are their own areas, for which each individual may take their own responsibility.
- hbbio 3y agoIt's a single atomic database transaction. The borrowing is for 0 second so almost virtual. It's exactly what flashbots are meant for. If you would ask ChatGPT to earn money trading, it definitely would do this... especially if this pattern is repeatable.
- lxgr 3y agoInterestingly, the interest rate charged seems to be 0.09% [1]. That's infinity percent when annualized! Either I'm missing something, or this specific implementation isn't priced correctly/rationally – competition should drive the rate for this down to exactly zero (no risk because there is no chance of losing money; no opportunity cost because the "lending" party loses use of their capital for zero units of time). In fact, some other blockchains/smart contracts do seem to price this capability at 0% [2]. [1] https://docs.aave.com/developers/v/2.0/guides/flash-loans https://docs.aave.com/developers/v/2.0/guides/flash-loans [2] https://developers.stellar.org/docs/encyclopedia/path-payments https://developers.stellar.org/docs/encyclopedia/path-paymen...
- aleksiy123 3y agoIs there actually no opportunity cost? Do the funds not have to be available at the time of the transaction? They may never leave your account but they still need to be there no?
- lxgr 3y agoTheoretically, the funds don't need to "exist": They're a fictional quantity; a scribble in the margin of an intermediate calculation, never to be committed to any ledger. Practically, I suppose that many smart contracts or blockchains don't see things that way and really do require the funds to be available in some account (that also consents to them being used in this way) to keep existing systems and protocols happy. I'd still argue that the marginal interest here should be zero or very close to it, in an efficient market (due to the time being infinitely short) – so seeing quotes of 0.09% of interest for flash loans makes me suspect that there's non-negligible friction somewhere.
- woutr_be 3y ago> After securing the flash loan, the bot employed it to deposit funds on Aave, a decentralized lending platform. It again borrowed a relatively small sum of $2,300 in Wrapped Ether (WETH) against the deposits, Arkham said. WETH, an ERC-20 token that can be used in smart contracts and is equivalent to Ethereum in price, was subsequently utilized to purchase Threshold Network (T) tokens on the Curve exchange. > Upon completing the arbitrage loop, the bot sold the Threshold Network tokens on the Balancer exchange, generating a gain of 0.019 ETH, Can someone explain this to me; it seems like all the profit came from the $2,300 worth if WETH. Why did it borrow $200M? Also how can this bot ensure all of those transactions happen within the same block?
- aatd86 3y agoPennies add up. Money is money!
- nextlevelwizard 3y agoNice website... A cookie nag for no reason and then pop up for signing up that doesn't close with the "x" or "No Thanks". Man we need some form of great purge on the web to get rid of all of these awful shit websites.