Recently, people have been discussing "arbitrage" everywhere, from "risk-free annual returns of XXX%" funding rates to DeFi mining arbitrage portfolios, and basic "brick moving"... Does it seem like gold is everywhere, just waiting to be picked up?
Today, let's dig deep into whether this arbitrage "meal" is tasty and how to eat it.
First, based on KOL perspectives, here's an overview of common arbitrage strategy types
Spatial Arbitrage: Cross-exchange (brick moving)
Time/Structural Arbitrage: Funding rates (spot-futures), spot-futures basis
Interest Rate Arbitrage: Stablecoin/Lending/LP Mining (DeFi/CeFi)
Cross-Asset Arbitrage: Triangular Arbitrage
DeFi Ecosystem Arbitrage: Cross-chain, aggregators, flash loans, etc.
Special Scenario Arbitrage: Prediction markets
Model-Driven: Statistical Arbitrage (Quantitative)
Next, a summary of KOL arbitrage posts
I. Node Scientist (Ø, G) @moncici_is_girl
《Crypto Arbitrage: How to Find "Free Lunch" in the Cryptocurrency Market? [Theoretical Edition]》
Provided a relatively comprehensive crypto arbitrage theoretical framework, covering multiple mainstream strategies.
1. Cross-Exchange Arbitrage: Utilizing price differences for the same coin across different exchanges (CEX or DEX), buying low and selling high.
2. Triangular Arbitrage: Within a single exchange, leveraging exchange rate imbalances among three trading pairs (like BTC/USDT, ETH/BTC, ETH/USDT), profiting through continuous trading (A→B→C→A).
3. Spot-Futures Arbitrage: Arbitraging based on the basis between spot market and futures contract prices, typically buying spot and selling futures, expecting price convergence at expiration.
4. Funding Rate Arbitrage (Perpetual Contracts): Holding opposite spot and perpetual contract positions (like buying spot + shorting perpetual contract), mainly to earn funding rates (when positive).
5. Flash Loan Arbitrage (DeFi): Using unsecured flash loans from DeFi protocols to complete a series of arbitrage operations within a single transaction block (like buying/selling across different DEXs), then repaying the loan.
6. Statistical Arbitrage: Identifying temporary deviations in price patterns or correlations based on statistical models and historical data, trading with the expectation of price mean reversion.
(Translation continues in the same manner for the entire text)Seven, Brak @0x brak
Sharing real players' views on current arbitrage profits and strategies
Discussed arbitrage strategies and mechanisms (including controversial ones)
1. Funding Fee Arbitrage: Cross-exchange hedging to earn rate differences.
2. Spot-Futures Arbitrage: Profiting from price convergence between futures and spot prices on delivery dates (e.g., BN-0328-BTC futures and spot BTC).
3. Spread Arbitrage: Covering DEX/CEX price differences, triangular arbitrage, flash loan and other strategies utilizing direct price differences.
4. PT Arbitrage (Pendle): Trading Pendle's principal tokens (PT) to convert airdrop expectations into fixed income, requiring research on underlying assets and hedging non-USD PT risks.
5. JLP/HLP Arbitrage (Pendle): Holding Pendle liquidity certificates, hedging underlying asset risks, earning fees and airdrop rewards (noting most do not hedge).
6. YT Flow (Pendle): Buying Pendle yield tokens (YT) when price has sufficient safety margin, speculating on future yields (e.g., early $ENA, $USDC mining).
7. Options Flow: Arbitraging pricing distortions in options markets caused by sentiment, using spread and straddle strategies.
8. MEV/Scientist Flow: Extracting value on-chain through transaction sequencing (such as sandwich attacks).
Eight, Pix @PixOnChain
How I Made $ 100 k Arbitraging Between Prediction Markets (Full Guide)
The core strategy shared is prediction market arbitrage, profiting from pricing inefficiencies across different platforms for the same event outcome, rather than gambling.
Key methodology:
1. First, search for the same event across multiple prediction markets, especially focusing on markets with multiple possible results.
2. Find the lowest purchasable price for all possible event outcomes across platforms and sum them; if total cost is below $1 (or 100%), an arbitrage opportunity exists. Execution must be extremely fast, as price differences vanish instantly (a "latency game"), recommending automated tools to buy the lowest-priced shares for all outcomes on respective platforms to lock in profits.
Tends to select opportunities with high expected annual percentage yield (APY) (such as >60%), and may not necessarily hold until maturity, considering early exit if the market selling price of all held shares is higher than the cost to improve capital efficiency.
