Defi AMM Arbitrage Explained

Today's video covers how AMMs work and how specifically we can use arbitrage to exploit them.
Learn more about AMMs here from Binance Academy: academy.binance.com/en/articl...
Search for different swapping platforms/protocols here: dappradar.com/rankings/protoc...
Platforms used:
info.julswap.com/home
bscscan.com/
For a step-by-step guide for generating both active and passive income (not yield farming), take a look at this course of mine: bitcointradingpractice.com/co...
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Disclaimer: The content covered in this video is NOT investment advice and I am not a financial advisor. The material covered within these videos is for educational purposes only. Always do your own research and only invest based on your own findings and personal judgment. Happy Trading!

[@paulkamba687]

Thanks for the explanation on AMM

[@dwood5326]

Great video

[@jessesanchez08]

Awesome vid

[@markavreal4457]

Thank you

[@novafrost5542]

ok i get it but how do we swap token in that particular liquiditypool?

[@TheGodfather2610]

- Could you please explain how a 0,1% per day can be done better in DEFI space with low risk on stablecoin pair? I think it sounds very good. You say there is plenty of other possbilities, with even lower risk. Please name a few, I struggle to just find 1 other opportunity. - Also I don't understand the risk involved in Stablecoin-Stablecoin LP. Lets say the ratio is 75:25 BUSD:USDT. Would that mean there is a price difference 1,25USD : 0,75 USD? Please elaborate

[@siamakbahadorinejad7762]

Thanks bro. I have learned many things from you. Just I have a question. After many research and learning now I can using flash loan for arbitrage strategy but still I don't know any Bot for Arbitrage on Dex. Do you know any Arbitrage bot on Dex?

[@saeedalzaabi3854]

Is this method can be done with flashloan? In case the flashloan is 1M and deposited to the LP is that gonna have some positive return?

[@Dadinh0o]

Finally got it! Tnks, does anyone know how to find The addres of binance liquidity pools?

[@zeusyoung6652]

Its explained well, nice Btw any suggest for undervalued one?

[@seanlou7681]

$FRM could be suitable for you, dyor it bro

[@dyoyoung1749]

@@seanlou7681 Agreed, undervalued one with unique product and great performance could be good for long invest

[@zeusyoung6652]

@@dyoyoung1749 are they really good?

[@dyoyoung1749]

@@zeusyoung6652 I think soo, with high interoperability chain, variable and flexible staking feature, could be great to invest

[@seanlou7681]

@@dyoyoung1749 Exactly, they also well known as good platform for staking, its reasonable their staking client 70+

[@Cal97g]

Legend

[@gemshunter7693]

Great and excellent explanation! As it should. Anyways, BTC is dumping.

[@gemshunter7693]

What is your strategy to maximize profits in this phase?

[@stansberryresearch5794]

•F•o•r•i•n•s•i•d•e t•i•p•sand g•u•i•d•a•n•ce•w•r•i•t•e•m•e d•i•r•e•c•t•l•y o•n w•h•a•t•h•s•a•p•p• +...1....7....2....5....8...7...7...1...3...8...5

[@ahmedabbas8811]

Hi Bennett! Thanks for the concise explanation. I have a question - would it be possible to intentionally upset the equilibrium of any such pool? Let's say, me & 9 friends of mine have 10 BNB each and we decide to swap 100 BNB for BUSD, upsetting the ratio of the pool. Then could we swap that BUSD for BNB on 1inch and swap that back on the target pool? Could that work?

[@whiteswordwarrior9995]

Ofcourse not lol

[@paulfaverjon7294]

@@whiteswordwarrior9995 why not ?

[@SuperDangerousMouse]

@@paulfaverjon7294 because you are the one getting ding'ed in this case. In the first pool, you sell your 100 BNB's and get BUSD for it? Well you just pushed the price down so much. Say the starting price of the pool is BNB = 300 BUSD. (for the sake of simplicity), you sold the first BNB for 300 and the last BNB for 100. So you averaged 200 in your sales (the math is not right, but just to prove the point). So now, you sold your 100 BNB for an average of 200 dollars. You go to 1inch (or whatever dex or cex you want), and you can buy BNB, for .... guess what? 300 dollars, because that's the fair price. So you sold for 200, and you're trying to buy for 300. Not wise.

[@trainmango]

this can only happen when liquidity pool is seperated, spread is low and big movements occurs. such arbitrage is available in traditional trading system as well. nothing new!

[@professorkiyoshi9069]

@bitcoin trading challenge hey man I have a quick insight about this, doesn't the pool auto swap to retain the 50/50 ratio after the trade is made internally in order to balance out the price. I believe that this is how these works on the back end with their amm software. In your bnb scenario it would auto buy bnb from its own pool and always retain 50/50 weight. this auto buying on the back end is what causes the IL when you are a liquidity provider because it does this auto balancing on the back end when there are price rises too.

[@bitcointradingchallenge3861]

I believe that it is actually arbitrage that causes price to float back to parity, but if you provide me with an article/doc saying otherwise I would love to read it

[@Adamiere]

Great video as always. If you’re ever in nyc let me buy you a drink.

[@stansberryresearch5794]

•F•o•r•i•n•s•i•d•e t•i•p•sand g•u•i•d•a•n•ce•w•r•i•t•e•m•e d•i•r•e•c•t•l•y o•n w•h•a•t•h•s•a•p•p• +...1....7....2....5....8...7...7...1...3...8...5

[@raulmonge99]

From an amm arbitrage bot programmer, I am telling you it is almost impossible to do it manually, you have to keep in mind the fees from the protocol swap and the fees from the transactions, and for sure deploying a smart contrat to do it in 1 transaction.

[@SuperHawu]

Raul thanks for your infos. Could you explain, what you mean by : "and for sure deploying a smart contrat to do it in 1 transaction"?

[@SuperHawu]

And who is (front)running the arbitrage bots, the same people who running the dex's? Is it true that the arbitrage bots causing amongst others the high eth gas fees? And can the arbitrage bots be considered in that way, that they causing the il, or is that a wrong assumption?

[@raulmonge99]

@@SuperHawu Deploying a contract will do the arbitrage directly in 1 transaction, because if you want to do arbitrage you can do eth-erc20 token but some times you have oportunities with erc20-erc20-eth and you had to do an approve transaction of the erc20 tokens, if you do it separately you will have to wait you approve transaction to do the arbitrage, so you program a contrat to do it only on 1 transaction. The frontrunning normally do it other arbitragers looking at the mempool of the ethereum nodes. You can compete with them in gas wars but you have to calculate so well if you are profitable to dont lose money. One of the reasons of the eth high gas are arbitragers or frontrunnes, look at some of the top 10 wallets that use gas, some days are algorithmic arbitragers. And other factor to have is the slippage with that you do the swaps, you will get sandwiched if you put high slippage, and surely lose money or get your transaction reverted.

[@SuperHawu]

@@raulmonge99 much appreciation 🤗. Best regards and good times...

[@stansberryresearch5794]

•F•o•r•i•n•s•i•d•e t•i•p•sand g•u•i•d•a•n•ce•w•r•i•t•e•m•e d•i•r•e•c•t•l•y o•n w•h•a•t•h•s•a•p•p• +...1....7....2....5....8...7...7...1...3...8...5