Trading Bot Secures $200M Loan for Minor $3.24 Crypto Gain


As one crypto community member put it, “profit is profit,” regardless if it is only $3.

A digital cryptocurrency trading bot was recently able to execute an intricate chain of transactions on the Ethereum blockchain, leveraging a flash loan worth $200 million. Remarkably, the system accomplished it for a rather insignificant profit of just $3.24

On June 14th, Arkham Intelligence, a blockchain analytics company, disclosed the details of this intricate maneuvering.

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The company shared that an algorithmic trading bot specializing in arbitrage had enacted these transactions. It utilized flash loans – a unique feature in the blockchain world that allows borrowing significant amounts without collateral. 

The analytical firm elaborated on the underlying reasons for such a large loan. They pointed out that the MakerDAO’s “DssFlash” contract permits borrowing against any amount of its stablecoin, Dai (DAI), completely free of fees. The only limitation on this is an upper ceiling of $500 million.

Continuing its investigation, Arkham revealed that the trading bot first borrowed 200 million DAI from the MakerDAO decentralized finance (DeFi) protocol. It then deposited these funds into the Aave DAI market. The next step involved borrowing 1.349 Wrapped Ether (WETH) against these funds. This WETH was subsequently utilized to buy Threshold Network (T) tokens on the Curve Finance exchange and then resold on the Balancer liquidity protocol

The culmination of these operations brought the bot a profit of 0.019 Ether (ETH), equivalent to $33 at the time of the transaction. However, transaction fees were worth around $28.76, coupled with an additional $1 paid to the block constructor, which lowered the bot’s profits to $3.24.

While it’s undeniable that the risk taken was quite high for such a miniature return, the achievement was not entirely unappreciated. As one observer from the cryptocurrency community aptly noted, “profit is profit.”

The incident provides a snapshot of the intricate maneuvers that can occur within the world of cryptocurrency trading. Even though the profit, in this case, was meager, it signifies the potential complexities and strategies deployed in this fast-evolving digital financial landscape.

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