Liquity Arbtrage Bot

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# Liquity Arbitrage

This project will perform an arbitrage of LUSD/ETH pair. This will be done by 2 steps

1. Swap ETH for LUSD at uniswap

2. Redeem LUSD for ETH at liquity

# Design

The project has two main components , one is the node server and another is the smart contract.

The node server is responsible for keeping a track of the prices of ETH at chainlink and at uniswap. When we notice a price difference where there is a possiblity of a profit from arbitrage it will trigger the smart contract to perform the arbitrage between uniswap and liquity smart contracts.

### How is the amount of eth to be used for the arbitrage calculated ?

We have three restrictions in determining the ETH that can be used for the arbitrage.

1) The ETH present in the arbitragers wallet

2) The redeemable amount at liquity

3) The uniswap reserves in the LUSD/ETH pair

We will first take the minimum of


min( <ETH present in Wallet> , <12.5% of the reserve pool of uniswap pair> ) // We will not use a bigger percentage of the uniswap pool because it will impact the prices heavily


Once the minimum is determined we will then check at liquity if we can redeem LUSD the amount of ETH swapped. If not , we will use the redeemableLUSD at liquity to determine the ETH used for swap.

###### Note: The smaller the percent of the uniswap pool we can use the better prices we can get, I have taken 12.5% of the pool for now because the pool reserves are small.

### How will it determine if there is an arbitrage opportunity ?

We can determine the arbitrage opportunity by the following formula.


profit = ETH_USED * (uniswapPrice/chainLinkPrice) * (1-redemptionFeePercentage) * (1-uinswap_liquidity_provider_fee) - GasCost


If we find that the profit is positive we will then invoke the smart contract.

### What mechanism will be used to make sure the server can be run 24/7 ?

To run the server 24/7 we will need a poller mechanism which will continously monitor the prices. To do this , this project will subscribe to the new block headers generated in the ethereum chain. This is done considering uniswap prices are updated after every block is mined.

# Deployed contract on Goerli testnet

![image]([login to view URL])

# How to start

Run the following commands


> npm

> cp node_modules/@liquity/lib-ethers/deployments/default/[login to view URL] node_modules/@liquity/lib-ethers/dist/deployments/[login to view URL]


After this add your private keys and wallet addresses to .env file.

#### To start the server:


npm start


Once the server is started you will need to ping `localhost:3000` to start polling for prices.

###### Note: We use redeemLUSD function to determine the input values for the smart contract inputs, to run the redeemLUSD we need LUSD present in our wallet. So keep a amount of LUSD equivalent to the ETH in your wallet or the amount being arbitraged for.

#### Sample `.env` file



WSS_PROVIDER='wss://[login to view URL]'

HTTPS_PROVIDER='[login to view URL]'




[Dev Yadav]([login to view URL])

Blockchain Solidity Ethereum Smart Contracts React.js

ID Projek: #36688346

Tentang projek

8 cadangan Projek jarak jauh Aktif 2 bulan lepas

8 pekerja bebas membida secara purata ₹206250 untuk pekerjaan ini


Dear Client, Our company has 20 years of experience in developing web, mobile, blockchain and AI projects. We are confident that we can provide you with the best solutions for your project. Some of the solutions we p Lagi

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Hello Client, My name is Eniola and I am a Professional Developer with experience in Smart Contracts. I understand that you are looking for someone to create a Liquity Arbitrage Bot project that will perform an arbitra Lagi

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Liquity is looking to hire a skilled React.js developer to help create an arbitrage bot for the LUSD/ETH pair on the Goerli testnet. With your skills, experience and knowledge of the field, we believe you will be able Lagi

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