Arbitrage is a trading strategy that take advantage when there is a price difference/ exchange rate of asset pairs on different markets. This analytics is done to study the arbitrage trading dynamics on Jupiter, a dex swaps aggregator on Solana Ecosystem. This study concerns with case that starts form 1st February 2022.
1.0 Introduction
An arbitrage is a trading opportunity when there is a difference in exchange rate on two market makers. Traders use this to buy an assets cheaper on one market maker and sell it to other for higher price. Typically the profit is not huge as market tend to "correct" its price according to demand, but armed with bot scripting and massive funds, traders can make huge returns.
Example:
Consider the following exchange rate:
On one day, Sushiswap offers ETH for 2000 USDC while Uniswap offers ETH for 2001 USDC.
An arb trader would acquire 1 ETH on Sushiswap, then sell it for 1 USDC higher on Uniswap. This will make the trader gain a profit of 1 USDC. of course this does not account gas fees, but this is a mere representation of what an oversimplified arbitrage trading looks like.
2.0 Result
Arbitrage Trading Outcome
The below Pie Chart represents the amount of transactions that either gain more than 1% profit or less than 1% profit. Only about 5.6% at 7,791 transactions has made 1% gain or more, while almost 130,000 transactions (the other 94.3%) consist of profits less than 1 %.
The Top 10 Arb Traders
Below shows the list of top10 arb traders. The highest has made a nett of 589,443.92 USD of stablecoin equivalents on arbitrage trade alone. The lowest of the Top 10 has made about 4,500
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