đ How My Friend Made $160,000 Last Month from Arbitrage đ
He used GPT-4 to write the system. Hereâs how he did it đ§”đ
Understanding Arbitrage:
- The difference between prices on two platforms is called arbitrage.
- New tokens and presales create high volatility, offering profit opportunities.
Automating Arbitrage with Chat GPT:
- My friend, not a developer but familiar with prompts, automated this process.
- Anyone can create an arbitrage bot using this method.
Types of Arbitrage:
1. DEX â CEX
2. DEX â DEX
3. CEX â CEX
4. Complex forms involving multiple DEXs or CEXs
Key Events Creating Arbitrage Opportunities:
- Listings
- Token migrations
- Hacks
CEX - CEX Arbitrage
- Competitive due to market makers, but opportunities arise when their bots fail.
- Possible Issues:
- Closed deposits/withdrawals
- Account blockage and frozen funds
- Requirement:
- Verified KYC accounts on major exchanges like Binance.
DEX - DEX Arbitrage
- Challenge: MEV bots on one network
- Strategy: Use DEXs with their own pools and bridges across networks
- Steps:
- Get API from DEXs
- Use Chat GPT to create a structure covering each DEX and bridge
- Prepare trading logic (e.g., buy on DEX1, bridge, sell on DEX2)
- Possible Issues:
- Lack of liquidity
- Token migration
- High slippage
- Preparation:
- Deposit native tokens to popular networks (Solana, Ethereum, Base, Arbitrum, Optimism, BSC)
- Pre-approve protocols to expedite transactions
DEX - CEX Arbitrage
- Scenario: Price discrepancies between DEXs and CEXs
- Example: An Indian exchange hack caused a 5% spread between DEXs and CEXs for FLOKI and PEPE.
- **Action:** Combine scripts from previous parts into one cohesive program
Final Thoughts
- This thread covers only the basics.
- To succeed:
- Dive deep into protocols and possible routes
- Research thoroughly
- The hard work will yield incredible rewards.
