- An Ethereum whale employs a profitable arbitrage strategy involving staked ETH (stETH).
- The strategy consists of exchanging ETH for stETH at a slight premium on a DEX, then redeeming stETH 1:1 for ETH via Lido.
- The whale swapped 1,370 ETH for 1,370.3351 stETH on 1inch, resulting in a profit of 0.329 ETH ($540) after gas fees.
An on-chain analyst named Lookonchain recently outlined a profitable arbitrage strategy used by an Ethereum whale involving staked ETH (stETH).
1/ This whale has been doing arbitrage with ETH/stETH.Let’s take a look at his strategy and see how much money he makes. pic.twitter.com/HtsgdiNb8i
— Lookonchain (@lookonchain) October 9, 2023
According to @lookonchain, the whale exchanges ETH for stETH on a DEX at a slight premium and then redeems the stETH 1:1 for ETH via Lido. This allows the whale to pocket the spread between the ETH and STETH prices.
For example, the whale swapped 1,370 ETH for 1,370.3351 stETH on 1inch, paying 0.0061 ETH ($10) in gas fees. Redeeming the stETH for ETH netted a profit of 0.329 ETH ($540).
While not a huge return for a single trade, doing this daily with 1,370 ETH would generate 118 ETH ($194,000) …
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