An arbitrage bot made headlines by executing a flash loan worth $200 million in the DAI stablecoin from MakerDAO, generating a profit of $3.24 after transaction fees.
An Arbitrage Bot Obtained 200 Million DAI Tokens and Used Them to Borrow $2,300 Worth of Wrapped Ether on Aave.
An arbitrage bot made headlines by executing a flash loan worth $200 million in the DAI stablecoin from MakerDAO, generating a profit of $3.24 after transaction fees. The bot capitalized on MakerDAO's 'DssFlash' contract, which allows users to borrow DAI without incurring fees. Through the loan, the bot obtained 200 million DAI tokens and used them to borrow $2,300 worth of wrapped ether on Aave. Subsequently, it traded the WETH for Threshold Network on Curve and then sold it on Balancer in a series of rapid transactions within a single block. Although the total profit amounted to $33, nearly $30 was consumed by transaction and protocol fees, resulting in a net profit of $3.24.
The arbitrage bot could have borrowed a relatively small amount of $2,300 due to limited liquidity, which could have accounted for the small gains. However, flash loans have gained notoriety for their potential misuse in the decentralized finance (DeFi) space. Previous instances of flash loan exploits on platforms like Platypus and 0VIX have caused losses exceeding $10 million.
