The rise of DeFi and increasing adoption of cryptocurrencies have created endless wealth generating opportunities for the masses. The bustling ecosystem offers unrestricted access to a plethora of new-age financial instruments that are constantly augmented with new technology developments. While these instruments are new, the underlying basic financial principles remain unchanged.
Most of the wealth generating activities in the crypto sector revolves around investing, trading, mining, staking, lending, and yield farming. Of all these, investing and trading remains the most preferred methods for the masses, and rightly so. Thanks to the volatile nature of crypto assets, traders can work the varying prices to their benefit. Now, with multiple crypto platforms, blockchain protocols and other DeFi solutions in action, arbitrage opportunities remain huge and those who manage to successfully tap it will be the happiest of all traders.
So, what is Arbitrage Trading in Crypto?
If one has to broadly define arbitrage, it is an opportunity to profit from the price difference between identical assets across different markets. The difference in price can be exploited by buying the asset on a market or a platform where it is trading at a slightly lower price and immediately selling it on a market where it commands a higher price. In the present-day scenario, the availability of assets on multiple chains on various decentralized exchanges and AMMs provides ample opportunities for arbitrage trading cryptos. Any variance in demand and liquidity provisioning on the platforms, combined with the inherent characteristics like trading and network fees particular to the platform or its underlying protocol have a considerable impact on the asset prices, opening crypto arbitrage opportunities.
Arbitrageurs follow multiple methods to take advantage of these market inefficiencies. While arbitrage seems like a way to make easy money in crypto, ensuring profitability requires the users to have an in-depth understanding of the crypto market, significant trading experience along with accounts set up and ready to trade on multiple exchanges. They will also have to constantly monitor the markets either manually or with the help of bots or specialized software.
Crypto Arbitrage Gets Easier with Cross-chain Interoperability Tool
The requirements for profitable crypto exchange arbitrage could soon be a thing of the past as cross-chain compatibility of cryptocurrencies become a norm in the future. ShuttleOne, the project on its path to becoming the first of its kind operating system for blockchain has already made considerable strides in this space by introducing the Metachain. Acting as an aggregator of all blockchains, Metachain is a blockchain agnostic protocol, that enables true interoperability by as projects like ShuttleOne introduce blockchain agnostic multichain infrastructure that offer seamless cross-chain capabilities to projects. The Metachain enables the creation and deployment of true cross-chain tokens like its own native $SZO that can operate on any of the supported protocols.
Currently supporting Ethereum, Binance Smart Chain and Tezos ecosystems, the Metachain offers users the ability to monitor the tokens of their interest and execute transactions from within a single dashboard. Accompanied by the Shuttle Wallet, Shuttle Swap, and other features, ShuttleOne offers a holistic DeFi experience to the crypto industry.
Using ShuttleOne’s Metachain, anyone with the basic knowledge of executing cryptocurrency transactions can indulge in arbitrage trading, from within a single interface. The ShuttleOne Metachain bi-directional, multi-blockchain bridge is a first of its kind infrastructure that enables users to transfer tokens between multiple blockchain protocols at low costs. Further, these transactions can be executed in no time, without worrying about holding the native tokens of each bridged ecosystem towards transaction or network fees. The $SZO token acts as a universal token for value exchange and payment of applicable network and transaction costs within the ShuttleOne ecosystem.
Crypto Arbitrage on Metachain in 4 Simple Steps
It takes just 4 steps to make good of any crypto arbitrage opportunities using Metachain – multichain trade and bridge tool. With the real-time token prices and direct connections to leading DEXs on multiple blockchain networks in place, users just need to do the following.
Step 1: Login to the Metachain interface and connect your wallet.
If you don’t have an account, signing up for one doesn’t take long. With an email address, a new account can be created in less than a few minutes. Having logged in, connect your preferred wallet that supports the protocols on which you want to buy or sell tokens (e.g., Metamask supports Ethereum and Binance Smart Chain protocols whereas Tezos is supported by Temple Wallet)
Step 2: Buy token on network with lower price
The whole idea behind arbitrage is to “buy low and sell high”, keeping that in mind, users can easily identify the network where the token of their choice is priced low, to execute a purchase using funds from the respective, compatible wallet and receive the newly purchased tokens into the same wallet.
Step 3: Bridge token to network with higher price
Having identified the network where the tokens, now in possession is sold at higher price, users can move their token to such network using Metachain bridge. The bridging process is as simple as executing a trade on the DEX, requiring users to connect the wallet containing tokens as input, select the destination network and wallet address to move tokens from one network to another.
On success, the token will be migrated to the network that commands a higher price, leaving users with just one more step to follow before booking profits.
Step 4: Time to sell the token
With the tokens now available on the network with a higher price, users can connect the wallet to which they received the bridged tokens and place a sell order for the desired number of tokens. Upon execution, the resulting USDT or any other token of choice will be credited to the connected wallet. If the entire arbitrage exercise is done right, the amount/value of resulting tokens will be much higher than what was spent earlier while purchasing the tokens at a lower price.
Tried and Tested, More Tokens and Features to be available soon
The ShuttleOne Metachain multichain trading and bridge tool is still in beta phase with many community members acting as beta testers. Currently, the platform supports three blockchains and $SZO as a cross-chain token. The beta platform is open to the public, with many users continuing to join the ecosystem every day.
There is no dearth of arbitrageurs on the platform, as many community members on the beta platform continue to make consistent profits through $SZO arbitrage trades.
As ShuttleOne expands the ecosystem to include support for more networks and their respective tokens, the crypto arbitrage opportunities will continue to increase, enabling everyone to take advantage of this easy-to-use feature to earn some easy money. On the flipside, arbitrage trading cryptocurrencies across exchanges will also contribute towards price stability across the platforms, which is a very good thing for the crypto ecosystem. In this whole setting, arbitrageurs using ShuttleOne Metachain trading and bridge tools will be playing the regulators while making profits in the process.
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