1. Scenario LUNA’s crash in May 2022 set off a wave of panic across the market. The price of $LUNA and $UST varied drastically among several chains and exchangers in the days that followed. There were many chances in that pandemonium. This is one of them:
2. The prices of $UST varied against network at BSC, Avalanche, Phantom and Polygon. The difference was 5-15% because people were panicking to sell their $UST. How do you take advantage of this? You basically buy on one chain at a lower price, send it to the other chain to sell at a higher price.
3. Why would this work? 3 reasons:
1) Panic — Fear causes panic selling.
2) Single chain users — Not everyone knows or is comfortable going cross chain.
3) Limited bot activity — The speed of $UST crash was unexpected.
4. Speed. Executing trades with speed is key. Tips:
• Have $UST charts for all 4 chains on a screen
• Have a multichain swap like @FinanceFirebird ready.
• Have the multichain bridge ready for transfer.
• Use a 1-minute chart.
5. Opportunity window
This window may be measured in hours, days, or weeks.
Chaos typically have a window of a few hours or days.
Small cap projects often have a window of days to weeks.
As there is a time limit, you must forgo sleep and social activities if you want to optimize your profits.
6. Cashflow
Always have stablecoins available to buy discounts.
Once you have made a profitable trade, bridge the stables back to the original chain.
Keep the money circulating quickly so you never miss out on pricing mismatches. And have stables on all 4 chains.
7. How to do this?
Step by step.
1. Identify a mismatch on the 1min chart.
2. Buy $UST.
3. Send it across to another chain with a higher price.
4. Sell $UST for stables.
5. Send stables back to original chain to buy more $UST.
6. Repeat until price returns to even.
8. Rules.
So how do you not get rekt doing this ?
Follow these rules:
• Do not swap amounts that have price impact >1%
• Do not hold too much inventory ( $UST ) on hand
• Always have SOME inventory to sell price pumps
• Set aside 50% of profits and compound other 50%.
Here is an example how to identify a mismatch:
If you want to arbitrage cross chain for massive profits: 1. Identify price mismatch 2. Execute with speed 3. Go hard in the window of opportunity 4. Manage your cashflow 5. Profit take and compound at 50/50 ratio
Disclaimer: This is not financial advice. The Content is for informational purposes only
