A crypto trading bot programmed to execute arbitrage trades made numerous complex movements within the Ethereum blockchain, including taking out a $200 million flash loan to earn a meager $3.24.
On June 14, Arkham Intelligence, a blockchain analysis firm, provided a synopsis of the bot’s movements. According to the company, the transaction was carried out by an arbitrage algorithm utilizing flash loans.
The analysis firm explained that MakerDAO’s “DssFlash” contract permits zero-fee borrowing on any quantity of DAI, up to a maximum of $500 million, at no cost. This implies the bot can make unsecured loans so long as the loaned assets are paid back within the same block.
Arkham asserts that the algorithm borrowed 200 million DAI from the decentralized finance (DeFi) protocol MakerDAO and distributed the funds to the Aave DAI market. Then, 1,349 Wrapped Ether (WETH) were borrowed against the funds.
The WETH was then used to acquire Threshold Network (T) tokens on the Curve Finance exchange, sold on the Balancer liquidity protocol.
The algorithm acquired 0.019 Ether, worth approximately $33, during the trade through these transactions. However, transaction fees for the exchange amounted to roughly $28.76, with an additional $1 sent to the block constructor. This left the computer with a profit of only $3.24.
A community member praised the bot, stating, “Profit is profit,” although the perceived risk was disproportionate to the quantity gained. According to one Twitter user, doing all of this for a tiny profit demonstrates how bad the bear market is.
However, not all bots engage in low-profit transactions. Using sandwich attacks against memecoin merchants, a bot operator earned over $1 million on April 20.
Most profits were generated by focusing on trading activity involving memecoins such as Pepe coin (PEPE) and Wojak (WOJAK).
