Unlike classic crypto arbitrage, where price differences can shift between sides (sometimes asset X is more expensive on the DEX, and sometimes it’s more expensive on the CEX), in stablecoin/fiat arbitrage the gap is typically one sided it’s almost always cheaper on the CEX compared to the DEX, and rarely the other way around (which is what actually creates the opportunity to close an arbitrage position). This dynamic requires deep liquidity on both sides (the CEX and the DEX).
Another problem is that both fiat and stablecoins often have low liquidity, which results in small profit opportunities (although, if we provide deep enough liquidity, profits could increase).
The combination of these two issues makes stablecoin arbitrage less attractive to traditional arbitrage traders.
About the Code
We have tried using off the shelf no code products so far, but unfortunately none have met our needs.
We plan to use the capital to match existing open-source solutions (such as Hummingbot and others) and adapt them to Celo’s needs. We will also explore open source MEV solutions and tailor them for Celo.( we have an initial version of the arbitrage running)
The operational capital will also be used as liquidity on both sides.
Our ultimate goal is to make these markets more competitive and profitable for other traders, creating an efficient market — not to operate as an arbitrage company ourselves.
We will do it in few stages
- bringing the liqudity to these markets
- Find the right abtrage code, and matching it to celo needs (the leading one seems to be humminbird, but we are still in development, we already have an inital version running)
- Finding the right open source MEV solution that we can match to Celo needs.
doing all the code from scratch is an insane amount of work, and hopefuly unnecessary today
In our last round - we brought to celo fastlane - Bancor - Arb Fast Lane
Which can be seen by their statistics brought amazing traction to Celo, Credit Collective Update – March 2025 - #12 by glenn
the problem is that it’s a Dex to Dex only 