Arbitrage Bot
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Last updated
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In order to control any price discrepancy between AFI and wAFI, the AQUA Finance team will implement an Arbitrage Bot that connects to the dev wallet which is the only wallet that will not be affected by the reflective mechanism.
This arbitrage bot will execute buy/sell orders only when either one of the tokens has 15-20% price discrepancy. For instance,
If wAFI price is higher than 20% of AFI price, the bot will send AFI to wrap smart contract without any fee then execute sell order to sell the wAFI to open market which will cause wAFI price to drop while at the same time execute AFI buy order to increase the price of AFI
If wAFI price is lower than 20% of AFI price, the bot will execute sell order to sell AFI to market without any fee which will cause price of AFI to drop while at the same time execute wAFI buy order to increase the price of wAFI.
The arbitrage bot executes buy/sell orders at random times but will work continuously to ensure that there is very minimal price discrepancy between AFI and wAFI.
As of now, the arbitrage bot has not been implemented, all arbitrage happens manually.
