Alcor Exchange: How to Arbitrage Trade
An arbitrage trade is a relatively quick trade that takes advantage of the slight change in price across swaps and exchanges.
This is not financial advice. This is educational material on how to do arbitrage trading, and in no way a recommendation or advice.
Do you ever go on CoinMarketCap and look at the exchanges section? You’ll see exchanges have different prices for the same asset based on the orders on that exchange.
If you could buy from an exchange with a lower price and sell at a higher price on another change, you could pocket the difference.
Let’s do this but on Alcor Exchange — the only open dex built on Proton. We love Alcor ❤
The Arbitrage
- Select a pair to trade on. Pairs with lower liquidity but some volume tend to have the most opportunities for arbitrage.
- Open Alcor — go to Swap in one window and the pair’s Market in the other.
- Review price in Swap. Compare to Market.
- Buy in one, sell in the other at a higher price.
- Fin.
Example using $BEGGARS / $XPR
- Buy 100M $BEGGARS for 442 $XPR
2. Sell 100M $BEGGARS on $BEGGARS/$XPR pair for 450 $XPR
3. Profit 8 $XPR.
4. Fin.
Review
Okay, did we make a lot of money? No. But, many arbitrage opportunities can be much greater, and that took less than a minute. It just takes a diligent person to continue to look for and find these price differences.
I have personally arbitraged thousands of trades of $METAL from MEXC to Proton Dex/Swap over the last year, which is a longer process involving CEX deposit/withdrawals (yes, I have reported this income to the IRS). Average trade profit on these arbitrages was between $3–$4, with rare highs in the $20s. Many opportunities exist in the crypto space; keep looking for them!
Cheers!
