Someone just turned $1.45 into $2 million! Here’s how.
Fortune favors the bold: one bold crypto user is now sitting on a $2 million fortune by trading $1.45 million for it. Welcome to the quirks of crypto.
One trader’s loss…
Sadly, this fortune didn’t pop out of thin air but was rather the loss of another trader who wasn’t paying attention, forgetting to set maximum slippage on a swap of $2M worth of 3CRV tokens for $2M in the USDT stablecoin. Unfortunately, the user’s sap request was sent by the KyberSwap routing service to a very illiquid pool, one that hasn’t even been used in 251 days. The pool only had about $2 worth of liquidity and so was only able to give the trader 5 cents. Taking $2M in. Ouch!
…is another’s gain
Somebody was swift enough to notice this (well, actually, somebody was smart enough to program a bot to notice this) and jumped at the opportunity. Since that highly illiquid pool now had a lot of 3CRV tokens and very few USDT ones, that had to be balanced out. But the way that pool was structured, it didn’t have to be $2M worth of USDT but rather enough to fix the proportion — aka, $1.45.
To be fair, the user had to spend 23 ETH (~$33k) for validator bribes to get his tx in before any other bot could. Still, an amazing return on investment for a trading move that required no work, just foresight and good bot programming.
It could’ve been you
Any of us could make the mistake of that first person who got 5 cents back for swapping $2M. Yet, few of us could be that lucky second person.
You can avoid the former by setting your minimum slippage on any swap you use and double-checking it when trading. But that’s just one of the possible mistakes when swapping. Human error is responsible for a lot of losses. Especially, if you’re not a professional trader. Instead, consider joining a fund of a trader with a proven successful track record (in DeXe Funds, traders’ history is on-chain and is easily visible to anyone, along with the fund’s strategy, size, and other parameters).
Same with being the lucky one. Who would’ve thought to monitor a dormant 3CRV/USDT pair pool? But a trader/fund specializing in such treasure hunts could dedicate his entire day to that. Putting in some funds with such a trader can nab you a small piece of a giant pie. With zero work involved.
Btw, if you prefer to invest together with friends, you can use a DAO pool or a sub-DAO to do that. You can use all the usual DAO tools like proposing specific strategies, payout schedules, etc.
The tools are there — who will use them when the next opportunity arises?
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