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A Cryptobot Dropped Millions for Some Bucks

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Jul 11, 2023
A Cryptobot Dropped Millions for Some Bucks

MakerDAO’s $200 million flash loan was emptied by an arbitrage cryptobot for a $3.24 profit. Arkham, a blockchain research company, published this on its Twitter feed.

The way the smart loan contract is set up is the cause of the significant discrepancy between credit and profit. The “DssFlash” contract by MakerDAO, as discovered by analysts, permits fee-free flash loans for any amount in stablecoin DAI. Additionally, as long as the transaction takes place on the same blockchain, any user can request and return an immediate loan from MakerDAO for up to $500 million.

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The transfer history shows that the bot borrowed around $2350 in tokenized wETH from the Aave V2 platform and invested $200 million DAI in return. On the Curve platform, the borrowed wETH was used to purchase a threshold network (T), which was later sold for a profit of 0.019 ETH (about $33) on Balancer. The bot made a total profit of $3.24 after arbitrage and transaction costs. The crypto community observed that such a modest profit on such a huge loan demonstrates just how far the market has fallen into bear territory.

It appears that during the market slump, traders that provide trading strategies made the greatest money. Maestro, a crypto Telegram bot, was able to generate $4.8 million in commissions in just May, according to a previous report by the editorial team. Actually, the bot doesn’t do arbitrage. As an alternative, it provides a copy-trading service, purchasing tokens that are listed on decentralized exchanges and monitoring trade signals and wallets. When the amount on the associated wallet reaches a minimum of 0.1 ETH (about $180), the bot makes successful trades and takes a 1% fee.

There are still inquiries for the bot, though. The bot gives two alternatives for generating a wallet: construct a new one from scratch or import an existing crypto wallet by supplying a private key, as the editorial crew discovered. In either case, the bot is given excessive access rights to the wallet, which may lead to financial waste.