There is now a first in the history of crypto. The recent Multichain attack caused significant price fluctuations on the Fantom blockchain. This situation resulted in an important development. Let’s look at the details.
The rise of the smartest arbitrage in crypto history
The price differences led to what some have called the smartest arbitrage in crypto history. Opportunistic traders were able to buy USDC at a 50% discount. It was also reflected in the news that they were selling off to make a profit in other chains.
Earlier this month, the questionable outflow of funds from the cross-chain router protocol Multichain was on the agenda. Accordingly, Fantom, which relied on Multichain to maintain accurate trading prices in its ecosystem, triggered a domino effect involving the depreciation of crypto assets on the blockchain.
Seizing opportunities in crypto arbitrage
The devaluation has led to differences in the prices of the same digital assets on different chains. Accordingly, this paved the way for what experts describe as the smartest arbitrage in Bitcoin history. Arbitrage refers to a type of trading that takes advantage of the fluctuation in the prices of assets in different markets. This allows investors to profit from small differences in prices of the same asset in various markets.
Crypto journalist Wu Blockchain took to Twitter earlier today to highlight such arbitrage associated with the price differential caused by Multichain’s recent problems. Crypto assets on Fantom tumbled after more than $125 million exited Multichain. Among the undervalued assets was a stablecoin. USD Coin (USDC), which was trading as low as $0.50 at the time.
A clever strategy worked out
USDC, which should have been pegged to the US Dollar, was unpegged on Phantom. So he lost his peg. An opportunistic trader whose address starts with 0xfad7 made an interesting move. Accordingly, Fantom’s native token began to transfer FTM from central crypto exchanges to the Fantom network.
These tokens were then used to buy USDC at a 50% discount. There was also a posting to a gambling platform that accepts crypto stablecoin deposits. The trader repeated this process several times. Accordingly, this ironically pushed the price of the USDC up to $0.90, which is just 10 cents away from the dollar peg.
Win big with crypto arbitrage
The gambling platform, where the discounted USDC is deposited, deposited the relevant amount into the trader’s account without realizing the source of the relevant stablecoins. The stablecoins were then redeemed for exactly $1. Accordingly, when we look at cryptokoin.com, the move brought the trader several hundred thousand dollars. Arbitrage has been described as “the smartest arb in crypto history” by Jeff Dorman, who serves as chief investment officer of trading firm Arca.
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