Arbera
  • 🐻Arbera Overview
    • 🐝Volatility Farming
    • πŸ’«Arbera Flywheel
    • πŸ’―Beras can't read
    • πŸ’΅Arbitrage
  • 🍯Dens
    • πŸ₯žGrowing Dens
    • βš–οΈOptimizing Trading with brTOKENS
    • πŸ’ΈFees
    • 🐾User Guides
      • πŸ”Identify Den APRs
      • πŸ“©Wrap into the Den
      • πŸ“₯Add Den LP (and stake)
      • πŸ“€Remove LP (and unstake)
      • πŸ“¨Unwrap from the Den
      • πŸ’ŒClaim Rewards
  • πŸ’°Tokenomics
    • 🚢User Journey
  • βœ…Deployed Addresses
  • 🌊Deep Dive
    • 🧠Smart Contracts
    • πŸ–‡οΈIntegration 101
    • 🎯User/Fee Flow
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On this page
  • When Arbitrage Opportunities occur:
  • Arbitrage Examples
  • When brTOKEN is cheaper than TOKEN
  • When TOKEN is cheaper than brTOKEN
  1. Arbera Overview

Arbitrage

Buy Low, Sell High.

PreviousBeras can't readNextDens

Last updated 7 months ago

When Arbitrage Opportunities occur:

Arbitrage is a trading strategy that takes advantage of price differences for the same asset across different markets. By simultaneously buying low in one market and selling high in another, traders can lock in a risk-free profit. Arbitrage opportunities typically arise due to market inefficiencies, and they are usually short-lived as prices quickly adjust to eliminate the disparity.

  • Liquidity Imbalances: When liquidity pools are thin or fragmented, the prices of the original asset and its synthetic Den can diverge significantly, creating massive arbitrage opportunities.

  • Market Timing Inefficiencies: Events such as liquidations, significant events, large transactions(e.g., the German Government selling Bitcoin, CEX implosions, black swan events), or external shocks (e.g., major news events) often cause temporary price discrepancies, which Arbera can exploit.

  • Continuous Fee Generation:

    Volatility farming doesn’t rely on specific market trends. Instead, it takes advantage of the inherent price movements present in all markets:

    • Bull Market: Rising prices create arbitrage opportunities as assets may be mispriced across markets.

    • Bear Market: Falling prices lead to similar results between original and synthetic assets.

    • Sideways Market: Even in periods of relative stability, micro-fluctuations in asset prices provide constant opportunities for arbitrage.

Arbitrage Examples

Below are two paths for arbitrageurs and MEV searchers to make successful arbitrage and to illustrate when and how these are taxed for the benefit of Den token holders, PL Stakers, and ARBERA tokens.

When brTOKEN is cheaper than TOKEN

No
Action
Result

1.

Buy brTOKEN

Buy brTOKEN (pay fee), distribute fees.

2.

Unwrap to TOKEN

Burn brTOKEN (pay fee), receive brTOKEN, distribute fees.

3.

Sell TOKEN for profit

Arbitrage Profit

When TOKEN is cheaper than brTOKEN

No
Action
Result

1.

Buy TOKEN

Buy pressure on TOKEN

2.

Wrap to brTOKEN

Create brTOKEN(fee, buy ARBERA, distribute fees.

3.

Sell brTOKEN for profit

Burn brTOKEN, buy ARBERA, distribute fees.

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