A crypto trading bot borrowed $200M but only gained $3.

A crypto trading bot was programmed to perform arbitrage trades on the Ethereum blockchain. It made several complex moves, including taking a $200 million flash loan, to ultimately secure a mere $3.24 profit. On June 14, Arkham Intelligence, a blockchain analysis firm, shared a breakdown of the bot’s movements. The transaction was made by an arbitrage bot that uses flash loans. According to the analysis, the Dai amount borrowed was high because MakerDAO’s “DssFlash” contract allows zero-fee borrowing on any amount of DAI, up to a limit of $500 million. This means that the bot can make uncollateralized loans as long as the assets loaned will be paid within the same block. The bot borrowed 200 million DAI from MakerDAO and supplied the funds to the Aave DAI market. Then, it borrowed 1.349 Wrapped Ether (WETH) against the funds and used the WETH to purchase Threshold Network (T) tokens on the Curve Finance exchange. The tokens were then sold on the liquidity protocol, Balancer. The bot gained a total of 0.019 Ether (ETH), valued at around $33 at the time of the trade. However, the transaction fees for the trade were roughly $28.76, with an additional $1 sent to the block builder. This left the bot with only $3.24 in profit. Despite the risk being high compared to the amount gained, some community members applauded the bot, saying that “profit is profit.” Others noted that doing all this for a small profit shows how bad the bear market is. Meanwhile, other bots are making much larger profits through sandwich attacks on memecoin traders. One bot operator gained over $1 million on April 20 by targeting trading activity from memecoins like Pepe coin (PEPE) and Wojak (WOJAK).

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