STRATEGIES
Arbitrage (Price Arbitrage)
Definition
Arbitrage is the practice of simultaneously buying and selling identical assets on different markets to profit from price differences. In DeFi, bots exploit price gaps between DEXs or CEXs.
Example
Example
If ETH trades at $2000 on Uniswap and $2005 on SushiSwap, an arbitrageur buys on Uniswap and sells on SushiSwap for $5 profit per ETH.
Risks to Consider
Risks
- Transaction costs
- Failed execution
- Slippage