No trading, just arbitrage.
Written by: Ada, Deep Tide TechFlow
This year's cryptocurrency market is not very lively.
The altcoin market is generally bleak, and apart from a few on-chain trading experts, few can consistently make money.
However, in this seemingly quiet market, there is still a group of people quietly making a fortune.
They can even be considered "outsiders":
They have no faith in cryptocurrencies, do not care about fundamentals or narratives, and are even less interested in trading emotions.
Their principle can be summed up in one sentence: only arbitrage, no trading.
Recently, the article by "Doll Sister" went viral. To some extent, she is also an arbitrageur, surviving on algorithms, emotions, and traffic differences.
What she and the arbitrageurs in the crypto space do is essentially the same: finding opportunities in the gaps of the rules and amplifying profits through execution.
In this world where speculation and innovation coexist, arbitrageurs are often more clear-headed than builders.
They see the system's vulnerabilities, misaligned incentives, delayed rules, and human greed.
In this issue, we interviewed several different types of arbitrageurs.
Their stories may tell us: making money in the crypto space can also be very stable.
Old Liu: Arbitrage is not a strategy, but a way of thinking
I am Old Liu, and I entered the crypto space in 2021.
Like many others, it was around the peak of DOGE and SHIB in mid-2021. A friend of mine who runs a building materials business recommended it to me after he made money by mindlessly buying in: "Come on, you can make 10,000 a day here."
You can guess the result: in this wave of dogecoin miracles, he made money, I lost, and became the one left holding the bag. But that experience made me realize for the first time that in the crypto space, market sentiment can quickly and directly turn into wealth.
Then, after the last frenzy of chain games at the end of the year, a bear market lasting four years arrived. It was this bear market that gave me time to discover some phenomena, such as price differences between exchanges and exchange rate differences between BTC and ETH.
At that time, I hadn't thought about making money from it; I just felt that there were too many misalignments in this market, and the delays between information and prices were money. Later, I discovered that the information gap in web3 could be precisely utilized. I gradually transformed from an observer to an arbitrageur.
My major and job are somewhat related to finance, but I am not from a trading background at all.
Many people hear the term arbitrage and think it requires advanced technology and high-level scripts, that only financial experts can play. In fact, when I first got into arbitrage, it was very primitive; it was just manual arbitrage. No scripts, no bots, relying on my eyes, hands, and internet speed.
Later, I started learning to use tools and scripts with another friend. Even though I later incorporated some quantitative methods, the core remained grassroots trial and error.
So I think the deep influence of my grassroots background is that when I look at the crypto space, I have a third perspective. I do not blindly believe in new finance, nor do I reject technology. I do not rely entirely on trading; I lean more towards arbitrage logic. I go where it is simple and has a low threshold. I learn by doing and refine my skills through learning; this has always been my process.
Conversely, if I had a background in quantitative finance or forex, I might have learned the Wall Street options hedging methods right from the start, which would have taken away a lot of the fun of exploring.
My first successful arbitrage was at the end of 2021, when there were often price differences for BTC and ETH on Binance and OKX, so I considered whether to do some manual arbitrage.
I bought ETH at 3600 on Binance, while OKX quoted around 3630, with a theoretical profit of $30/ETH. However, during arbitrage, on-chain congestion is a common phenomenon, and most price difference opportunities last only a few minutes or even seconds. By the time I completed the whole arbitrage operation and settled, I found that after deducting the transfer fees, transaction fees, and time fluctuations, my actual net profit was far lower than the apparent price difference.
Although I didn't make much, I experienced the joy of arbitrage for the first time.
When facing a large number of new projects on the market, I mainly look at two aspects: first, the fundamentals, the most basic TVL and on-chain activity, as well as team background, protocol income, and community enthusiasm. Second, the arbitrage space, assessing whether there are inefficient market opportunities, such as uneven liquidity or loopholes in airdrop mechanisms.
Additionally, I won't touch a project if it hasn't formed a price closed loop. For example, I ask myself three questions: Does this project have verifiable cash flow or profit logic? Are there obvious asymmetries in its mechanism? Are the incentives excessive? If the answer is "yes" to all, it means there may be arbitrage opportunities here.
Overall, I prefer DeFi and cross-chain projects because they offer more arbitrage opportunities.
To be honest, arbitrage can be quite torturous. On the surface, it seems like I'm just harvesting profits every day, but in reality, I'm wearing down my own nerves.
You have to deal with delays, volatility, and loneliness; those without a routine will quickly be consumed by anxiety.
Moreover, you need to learn to shut down. If you make a profit or incur a loss, you must not keep grinding away.
Shut down the computer when it's time, go out for a nice meal, or play some games. When your body and mind are clear, you can spot opportunities more accurately.
Recently, I bought a fish tank and started learning to raise guppies, which is very therapeutic during my spare time. The trick to raising fish is to first cultivate the water well, then let them grow without daily intervention. This is very similar to our ultimate goal in arbitrage.
In recent years, I have increasingly believed that the entire crypto space is actually about arbitrage.
Brushing points, harvesting airdrops, taking advantage of subsidies, exploiting rules, buying low and selling high—essentially, they are all about utilizing some form of asymmetry in the system.
Harvesting is a low-dimensional form of arbitrage, while quantification is a high-dimensional form, but the underlying soul is the same: discovering inefficiencies and amplifying them through execution.
So I often say, arbitrage is not a strategy, but a way of thinking. The essence is not just discovering price differences, but upgrading the way of thinking.
It keeps you in a continuous cycle of observation, verification, and execution. When you can maintain this awareness consistently, you become not just someone who earns price differences, but someone who can always earn price differences.
Once you possess an arbitrage mindset, you will find that the crypto space is not a casino; it is more like a mirror reflecting each person's understanding of efficiency, desire, and execution.
Brother Qingshui: Be a friend of time
I am Brother Qingshui, and I have been doing arbitrage for over three years, mainly focusing on primary market IPOs.
I first heard about blockchain in 2020 when I was still in cross-border e-commerce, but my business was declining, and I urgently needed to find a new outlet.
Later, I met some people in the crypto space in a paid community and started learning from them. At that time, I was very eager to succeed, so from 2022 to April 2023, I bought many courses and joined several paid communities, hoping to find opportunities to make money.
Later, I was fortunate that in May 2023, inscriptions began to appear in the market. I withdrew 10,000 from my credit card and started playing with inscriptions. It was really easy to make money at that time; from May 2023 to the end of 2023, I had a maximum floating profit of over ten million. However, because it was my first time encountering such a novel thing, I lacked self-discipline and did not take profits in time, and later all the profits were withdrawn. But this also allowed me to taste the sweetness; the money I earned helped me pay off my debts, and I had some left over, which I used to buy Bitcoin.
Since then, I have made arbitraging new projects in the crypto space my main job. Every day, apart from eating and sleeping, I am online keeping an eye on the latest project information. Later, I established my own paid community, Spark of Fire, which peaked with over a thousand members. I update the latest project information for my community members every day and write operation guides, hoping to lead a group of people to achieve good returns through risk-free arbitrage in the crypto space.
If I were to give some advice to newcomers in arbitraging new projects, I would say to lock in profits in a timely manner and not be greedy. From my experience, I once encountered a very regrettable situation. I participated in a project called PIPE, where the cost price was only 0.8u, but the project was very popular, and at its peak, the price rose to 8000u each, achieving over ten thousand times profit. I thought I could turn my fortunes around with this, so I held on and didn't sell, but then it started to decline. Perhaps out of a sense of unwillingness, I thought its price could come back and break the historical high again, so I held on. But the final result was that this coin eventually went to zero. This was a very profound lesson for me, and I often use this incident to remind myself or newcomers not to be greedy and to earn money steadily, gradually becoming wealthy.
Since the beginning of this year, there haven't been any particularly hot new projects in the market, so my community has slowly transformed into a comprehensive community. I share any profitable projects with my community members, such as Binance's Alpha, Spark protocol, etc. After being in this market for a while, I see that the main factor affecting people's ability to make money is their mindset. Many people go from initially ignoring new project arbitrage to later feeling it is out of reach, then to FOMO entering the market, and finally getting stuck holding the bag. This mindset is a typical "retail investor" mentality; many people dream of getting rich overnight, only to be slapped in the face by reality. Ultimately, it is about not being able to reconcile with oneself, walking further down the wrong path.
Leizi: Lock in profits with technology
I am Leizi, and I have been doing arbitrage for four years. Currently, I mainly focus on high-frequency arbitrage between multiple DEXs within the Solana ecosystem.
My entry into the crypto industry was somewhat accidental.
In the early days of the DeFi explosion in 2021, I was still working in sales in the traditional medical field. By chance, a friend mentioned the booming DeFi trend in the community, and I began to participate in trading altcoins and MEME coins. It was during this process that I truly felt the unique logic of this industry: "quick profits can be made through reaction speed and information gaps," and I first realized that there were opportunities here that differed from traditional industries.
The turning point that transformed me from a "participant" to a "deep diver" was when I encountered DEX arbitrage on the Solana chain in 2024. At that time, trading of MEME coins in the Solana ecosystem was experiencing explosive growth, with trading volumes skyrocketing. However, there were not many developers focusing on building arbitrage bots, so I immediately seized this opportunity, teamed up with a few like-minded friends, and started developing the first generation of arbitrage products based on the Jupiter protocol. We later iterated to develop a second-generation product that supports on-chain calculations, and now we have a third-generation product that can achieve off-chain calculations, manual optimization of trading routes, and core algorithms, gradually upgrading our arbitrage strategies to "refined efficiency optimization."
When I first got into the crypto space, I also played with MEME coins and chased hot coins in the community, but I quickly realized that the model of "making money through market fluctuations" was too unstable: sometimes I made money by luck, but the next wave of volatility would cause me to lose it back, and I even encountered projects that ran away, risking my principal. Especially after experiencing the market correction in 2022, I became clearer that what I wanted was not "one-time windfall profits," but a path that allows my funds to grow steadily. After all, preserving the principal and accumulating profits is essential for long-term survival in this industry.
Currently, my core logic for screening projects still revolves around "arbitrage demand." On a daily basis, we mainly rely on scripts we write ourselves to monitor the trading volume of tokens on the Solana chain in real-time. The scripts focus on tokens that experience "sudden surges" in volume, such as when a token's daily trading volume jumps from hundreds of thousands of dollars to millions, or when liquidity increases simultaneously across multiple DEXs. In such cases, price fluctuations often occur, creating arbitrage opportunities. We add these tokens to our observation pool and further calculate the price differences and slippage costs across different platforms to determine whether it is worth implementing an arbitrage strategy.
The changes in the arbitrage track over the past few years can be summarized as "the threshold continues to rise, and competition becomes increasingly refined."
In the early days of arbitrage in the Solana ecosystem, even using simple Python scripts and ordinary servers, one could achieve decent returns by capturing cross-DEX price differences. However, it is completely different now. Technically, everyone has shifted from "basic price difference capture" to "off-chain calculations + dynamic routing optimization." On the hardware side, the competition has become extreme, with some people specifically renting physical servers closest to Solana validation nodes and customizing network bandwidth to compress trading delays by a few milliseconds. In terms of personnel, more and more teams with backgrounds in traditional quantitative finance and fintech are entering the space, bringing mature risk control models and technical frameworks, which directly raises the competitive threshold in the industry.
Looking back now, I feel that the most regrettable thing is not a specific loss, but rather in the early days of the arbitrage track, when I missed several industry opportunities because I couldn't break through the core technology in time. The feeling of "knowing the opportunity is there, but being unable to seize it due to inadequate technical skills, and just watching others profit" is more frustrating than losing money.
Later, I gradually understood that in the Web3 arbitrage track, especially in a rapidly iterating ecosystem like Solana, "technology is the core competitiveness." Without solid technical skills, even if one can discover opportunities, they cannot be captured. It is precisely because of these regrets that I now place great importance on "continuously improving my technical skills." I set aside time every day to learn advanced Rust knowledge, study the underlying logic of on-chain transactions, and follow industry experts to learn strategy optimization. Even if the progress is slow, I do not want to miss the next market opportunity due to "insufficient technical skills." Ultimately, these regrets have made me fully aware: crypto arbitrage has never been about "seizing opportunities by luck," but rather "grabbing opportunities through technology." Only by breaking through core technologies early and continuously enhancing my abilities can I establish a foothold in the industry and avoid leaving new regrets due to "insufficient capabilities."
Qingshan: The Arbitrage Track is Becoming Crowded
I am Qingshan, and I have been in the crypto space for three years.
I first got involved at the end of 2022 during an event in the knowledge community "Shengcai Youshu," where I was introduced to "Web3 Small Voyage." The overall analysis and description of crypto in the learning materials made me eager to join this industry; I felt it was full of opportunities and gold everywhere.
During that event, I met many people, and through participating in various activities derived from seasoned crypto veterans, I gradually got in touch with and integrated into this industry.
In my three years in the crypto space, I have tried trading in the secondary market, simply dollar-cost averaging Bitcoin, investing in low-quality coins, and harvesting profits, but later found that asymmetric returns suited my rhythm better.
I do not have a background in finance or trading. Before fully entering the crypto industry, I worked in software development in a traditional industry. My five years in software development instilled in me a habit of viewing projects more rigorously. After all, all programs are written by people, and I do not have 100% trust in programs.
Every year, there are some profitable hotspots emerging, and I have been continuously learning and iterating with the market.
2023 was my most profitable year; at that time, inscriptions were very popular, and there were some excellent projects emerging. However, I mainly operated with a single account and did not think about leveraging human resources.
In 2024, I participated in Bitget's financial projects in bulk, mainly the FUEL launchx event, with a single account investment of five thousand dollars, and a deposit period of two days, yielding a return rate of 2%. While the return rate may not seem high, switching to an annualized basis is quite good.
This year, I mainly participated in financial activities of larger projects and Binance's Alpha points program. The Alpha program started at the beginning of this year and has indeed brought me the most stable cash flow project this year, with returns on single Alpha projects exceeding six figures.
The entire wealth effect this year has been centered around Binance. Paying attention to Binance's activities and newly launched projects has generally yielded good results. Searching for projects from Binance's cooperative activities and the "Binance Alpha" list can uncover some decent opportunities. For example, just a few days ago, Binance Wallet's "zerobasezk" financial activity had an annualized return of around 16%.
However, I feel that the arbitrage track is becoming crowded, with good opportunities becoming scarcer and time windows shortening. The long-term viability of this track is uncertain; every emerging wealth window follows this pattern: from a few people making money and most holding biases, to most people making money, attracting more participants, increasing the difficulty of making profits, leading to the rise of knowledge payment and training industries, and finally returning to the mean.
If this track ceases to exist in the future, I will shift my focus elsewhere. Wherever money can be made, I will go there, such as participating in IPOs in the Hong Kong stock market.
My earliest side job was participating in the A-share market's convertible bond IPOs. Before the new regulations on convertible bonds were introduced, this was also an almost risk-free market.
In summary, there will always be places where making money is easy, whether in the crypto space or convertible bonds; they are just vehicles.
From an industry trend perspective, the crypto space is an industry where funds are continuously flowing in. Earlier this year, U.S. President Trump issued his own tokens, and the establishment of Bitcoin ETFs and Ethereum ETFs have all signaled that the crypto industry is moving from niche to mainstream visibility. I believe that over time, it will become a well-known industry.
My advice to peers or newcomers entering the space is:
Black swan events will definitely happen. Focus on risk control; risk control is paramount, and never go all in.
There are many opportunities, but capital is limited. Cherish every bit of your capital and maximize its value.
Maintain a calm mindset; treat making money as a skill to be honed. Gradually refine your skills, and earning money is just a matter of time.
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