How Arbitjet’s AI Bots Execute Crypto Arbitrage 24/7

At Arbitjet, our mission is to turn every market inefficiency into profit—automatically, continuously, and transparently. Here’s how our proprietary AI-driven engine works in real life to capture every possible arbitrage opportunity across 150+ exchanges and DeFi platforms:



1. Cross-Exchange (Spatial) Arbitrage

1. Price Scanning: Our bots constantly monitor coin prices on dozens of centralized exchanges. For example, if Bitcoin trades for $100,000 on Exchange A but $100,300 on Exchange B, that $300 difference presents a potential profit.
2. Order-Book & Liquidity Checks: Before placing any orders, the system evaluates each exchange’s order-book depth to ensure there’s enough volume at the quoted prices—avoiding slippage or partial fills.
3. Fee & Transfer-Time Calculations: The bots calculate a “net spread” in real time, subtracting:

• Maker/taker fees on both exchanges
• Withdrawal and deposit fees (e.g., blockchain transaction costs)
• Expected transfer time (e.g., 10–20 minutes on Bitcoin or seconds on faster chains)

4. Sequential Execution Logic: If the net spread remains positive after accounting for all costs, the bot will:

• Buy Bitcoin on the cheaper exchange (Exchange A) at $100,000.
• Immediately—or as quickly as possible—sell it on the higher-priced exchange (Exchange B) at $100,300.
• Transfer the purchased coins from A to B (using an on-chain transfer or preferential “internal transfer” if exchanges share liquidity pools).
• Finalize the sale on Exchange B, locking in profit.

5. Small Loss Management: Occasionally, unexpected delays (e.g., sudden blockchain congestion) cause price shifts during transfer. In those rare cases, small losses can occur—but a handful of successful arbitrages quickly outweigh any minor setbacks.

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2. Triangular (Intra-Exchange) Arbitrage

1. Identifying Three-Way Loops: On a single exchange, our system continuously looks for price imbalances among three related pairs. For example:

1. ETH/BTC shows 1 ETH = 0.025 BTC (since ETH is $2,500 and BTC is $100,000).
2. BTC/USDT shows 1 BTC = 100,000 USDT (implying 1 ETH = 2,500 USDT).
3. ETH/USDT trades at 2,540 USDT—creating a 40 USDT discrepancy.

2. Fee-Adjusted Loop Calculations: The engine runs a quick simulation:

1. Spend 2,540 USDT to buy 1 ETH.
2. Sell that 1 ETH for 0.0254 BTC (via the ETH/BTC pair).
3. Sell 0.0254 BTC for 2,540 USDT (via the BTC/USDT pair).
   Netting 2,540 USDT minus small maker/taker fees across all three steps yields a positive return.

3. Atomic Execution: Because all trades happen within the same order book, the bot places each leg nearly simultaneously to lock in the spread. It only acts when it confirms that each leg can be executed at the expected price without slippage.

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3. Funding-Rate (Perpetual Futures) Arbitrage

1. Monitoring Funding Rates: On perpetual futures markets (e.g., BTC-USD perpetuals), traders pay or receive periodic “funding” to keep futures and spot prices aligned. If the funding rate is unusually high for long positions (meaning longs pay shorts), a profit opportunity arises:
2. Hedged Position: The bot shorts the perpetual contract (collecting the funding payment) while simultaneously buying the same amount of Bitcoin on spot, thus hedging price risk.
3. Net Yield: Suppose funding is 0.01% per eight-hour interval and total trading fees are 0.005%. The bot earns roughly 0.005% per interval on that position, compounding hourly or daily. When the funding rate turns negative, our bots simply reverse—going long on futures and short on spot to collect the opposite payment.

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4. DeFi & DEX Arbitrage (On-Chain)

1. Detecting AMM Imbalances: On decentralized exchanges (Uniswap, Sushiswap, PancakeSwap, etc.), token prices derive from liquidity pools. Our bots watch for cases where 1 ETH = 2,500 TOKEN on Uniswap but 1 ETH = 2,540 TOKEN on Sushiswap.
2. Flash-Loan or Atomic Execution: Using smart-contract-enabled “flash swaps,” the bot swaps ETH → TOKEN on the cheaper pool, then immediately swaps TOKEN → ETH on the more expensive pool—within the same block—capturing the price difference.
3. Gas & Slippage Control: Each opportunity is vetted against current gas costs (Ethereum, BSC, or other chain fees) and pool liquidity. If the net profit after gas and slippage (price impact in each pool) remains positive, the transaction is executed atomically, ensuring zero settlement risk.

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5. Statistical & Quantitative Arbitrage

1. Model-Driven Opportunities: Beyond obvious price spreads, our advanced algorithms analyze statistical correlations and historical relationships among baskets of tokens (e.g., ETH, LTC, BCH). When one coin temporarily deviates from its expected ratio, the bot buys the “undervalued” asset and shorts the “overvalued” one, betting on a reversion.
2. Real-Time Calibration: Machine-learning modules continually refine these models using live data, adjusting for shifting correlations and market regimes. If correlations break (for instance, during extreme volatility), the bot unwinds positions instantly to cap losses.

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6. Lending & Funding Arbitrage (DeFi)

1. Interest-Rate Differentials: In decentralized lending protocols (Aave, Compound, Maker), rates for borrowing and lending can vary widely. The bot borrows at a low APR on one platform and lends at a higher APR on another, pocketing the interest spread.
2. Collateral & Liquidation Management: Positions are continuously monitored. If collateral falls below required thresholds (e.g., due to a BTC price drop), the bot top-ups or repays to prevent liquidation. Protocol risk (e.g., smart-contract exploits) is managed by dynamically shifting to trusted platforms.

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7. Net-Profit Logic & Risk Management

1. Comprehensive “Net Spread” Calculation: For every arbitrage candidate, our engine computes:
   Net Profit = (Sell Price – Buy Price) × Trade Size
               – (Trading Fees + Withdrawal/Deposit Fees +
                  Network/Blockchain Fees + Expected Slippage)
   
   Only if Net Profit > 0 (by a configurable safety margin, such as +0.1%) does the bot proceed.
2. Dynamic Position Sizing: Trade size is capped by the lowest available liquidity across all legs—ensuring the order doesn’t significantly shift market prices.
3. Automated Learning: Every trade outcome (win or small loss) feeds back into our machine-learning engine. Over time, our system refines its parameters—focusing capital on the most consistently lucrative exchange pairs, tokens, and strategies.

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8. Handling Occasional Small Losses

• Slippage or Delays: If an on-chain transfer is delayed or market conditions shift unexpectedly, a small loss might occur. For instance, if our bot calculates a $300 net spread but, by the time assets arrive, the spread narrows to $100, we accept that $100 difference (minus fees) as a minor loss.
• Fee Surprises: Sudden changes in exchange fees or unexpected spikes in blockchain gas can compress margins.
• Exchange Outages: Rare technical failures or temporary suspension of trading pairs may force a rapid exit at a less-than-ideal price.

Even so, a handful of successful arbitrage trades—some capturing spreads of hundreds or thousands of dollars—more than offsets these small setbacks. Over days and weeks, net returns remain strongly positive, typically averaging 2–6% daily on deployed capital.

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9. Summary
In practice, Arbitjet’s engine is built to:

1. Scan globally for cross-exchange spreads and local inefficiencies.
2. Analyze multi-leg loops (triangular arbitrage) on single exchanges.
3. Capture funding-rate differentials across spot vs. perpetual futures.
4. Seize DEX price gaps via flash-loan atomic transactions.
5. Monitor lending markets for interest-rate arbitrage.
6. Leverage statistical models for pairs and basket strategies.
7. Weigh all fees, slippage, and transfer times before every trade.
8. Accept occasional losses as the cost of doing business—knowing that a few strong wins more than compensate, resulting in a consistent net positive return.

By automating these sophisticated strategies 24/7, Arbitjet turns complex crypto arbitrage into a seamless, hands-off profit engine—delivering consistent, transparent returns for our entire community. Not like forex, crypto markets are open all year round.

In Summary

Arbitjet’s engine transforms complex, high-frequency arbitrage into a seamless, hands-off profit machine. By aggressively scanning, analyzing, and executing across hundreds of venues, our AI bots turn even the smallest price differences—down to fractions of a percent—into real dollar gains. While occasional micro-losses are part of the process, they are quickly offset by the dozens of profitable trades that occur every hour. Whether you’re deploying $50 or $50,000, you benefit from the same institutional-grade strategies that drive multi-million-dollar arbitrage desks—delivering consistent, transparent returns for our entire community.

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