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<p class="is-style-lead">In the throes of a bear market, a crypto trading bot wagered $200 million to pocket a $3.24 profit. </p>



<p class="is-style-default">A high-stakes play for such a low return might leave you scratching your head, but in the labyrinthine world of cryptocurrencies, there&#8217;s a method to the madness.</p>



<p><a href="https://crypto.news/learn/what-is-a-blockchain/">Blockchain</a> analysis firm Arkham Intelligence recently shed light on a transaction orchestrated by a crypto arbitrage bot, an autonomous software program designed to profit from price differences between markets. </p>



<p>The bot borrowed a staggering $200 million from decentralized finance (<a href="https://crypto.news/learn/understanding-defi-and-its-uses/">DeFi</a>) protocol MakerDAO to make a series of complex trades, only to gain a $3.24 profit.&nbsp;</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
https://twitter.com/ArkhamIntel/status/1668921471387963393?s=20
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<p>But why? Let&#8217;s simmer down and break down the bot&#8217;s modus operandi.</p>



<h3 class="wp-block-heading" id="strong-the-million-dollar-move-strong"><strong>The million-dollar move</strong></h3>



<p>The bot&#8217;s move begins with MakerDAO’s &#8220;DssFlash&#8221; contract. This contract allows uncollateralized borrowing of any amount of DAI (a <a href="https://crypto.news/stablecoins-why-they-may-be-better-than-altcoins/">stablecoin</a> pegged to the USD), up to a limit of $500 million, as long as the loans are repaid within the same block. </p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">In fact, this bot is only constrained by the actual debt ceiling set by MakerDAO, which currently stands at $500M DAI.<br><br>This means that any user can borrow and return up to $500M DAI, as long as they perform the two actions in the same block. <a href="https://t.co/IO3vZnyDTd" target="_blank">pic.twitter.com/IO3vZnyDTd</a></p>&mdash; Arkham (@ArkhamIntel) <a href="https://twitter.com/ArkhamIntel/status/1668921486294528005?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 14, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>The bot seized this opportunity to borrow 200 million DAI, which was then supplied to the aave DAI market.</p>



<p>After the bot received the loan, it borrowed 1.349 wrapped ether (<a href="https://crypto.news/wrapped-eth-weth-the-myths-the-facts-and-the-reality/">WETH</a>), a token equivalent to ether (<a href="https://crypto.news/price/ethereum/">ETH</a>), but compatible with the ERC-20 protocol. </p>



<p>The bot then used this borrowed WETH to purchase threshold network (T) tokens on the Curve Finance exchange. The T tokens were then sold on the liquidity protocol, Balancer.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">In this case, the 200M DAI was borrowed from MakerDAO, supplied to the AAVE DAI Market, and $2.35K in WETH was borrowed against this.<br><br> The WETH was used to buy Threshold Network (T) on Curve and sell it on Balancer, making a total profit of 0.019 ETH ($33) <a href="https://t.co/D3ubgBB5pg" target="_blank">pic.twitter.com/D3ubgBB5pg</a></p>&mdash; Arkham (@ArkhamIntel) <a href="https://twitter.com/ArkhamIntel/status/1668921503939985414?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 14, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>After all these transactions, the bot&#8217;s profit stood at 0.019 ETH, valued at around $33 at the time. </p>




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<p>However, subtracting the transaction fees of roughly $28.76 and an additional $1 sent to the block builder, the bot&#8217;s profit dwindled to a mere $3.24.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">However, transaction fees for this arbitrage cost $28.76, and additionally $1 was sent to the block builder.<br><br>This makes the bot&#39;s revenue a grand total of: $3.24.<br><br>Check out this entity on Arkham, using the link below:<a href="https://t.co/R4QdyRLJut" target="_blank">https://t.co/R4QdyRLJut</a></p>&mdash; Arkham (@ArkhamIntel) <a href="https://twitter.com/ArkhamIntel/status/1668921507094093825?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 14, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<h3 class="wp-block-heading" id="strong-revisiting-the-community-strong"><strong>Revisiting the community</strong></h3>



<p>Opinions emerged from the crypto community, painting a picture of bemusement and admiration.&nbsp;</p>



<p>A user on Twitter expressed their view of the current market downturn with a pithy comment: &#8220;bear market so bad someone arbitrage $200m for $3 profit &#8220;.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Got to respect the grind</p>&mdash; Googly (👀,🫡) (@0xG00gly) <a href="https://twitter.com/0xG00gly/status/1668921707082416128?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 14, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>Meanwhile, another user nodded to the unyielding grind of the bot, acknowledging the hard-fought profit, however small, with a simple salute: &#8220;got to respect the grind&#8221;.</p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
https://twitter.com/apesmartchain/status/1668998457447657476?s=20
</div></figure>



<h3 class="wp-block-heading" id="strong-a-brave-new-world-strong"><strong>A brave new world</strong></h3>



<p>Whether you view it as an absurd stunt or a testament to the cutthroat competition of the crypto trading world, one thing is clear: in the fast-paced and complex universe of cryptocurrencies, even seemingly bizarre moves can have their own twisted logic. </p>




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Crypto bot borrows $200m for a $3 profit

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