An arbitrage bot flash loaned $200 million worth of the dai stablecoin (DAI) from MakerDAO on Wednesday, making a $3.24 profit after transaction fees.
The bot took advantage of MakerDAO’s ‘DssFlash’ contract, which permits users to borrow any amount of DAI without incurring fees, according to crypto data provider Arkham Intelligence.
A flash loan is a type of loan that is received and paid back within a single block without any upfront collateral. In this instance, the bot borrowed 200 million DAI tokens and supplied them to the Aave DAI market, borrowing $2,300 worth of wrapped ether (WETH) against it.
That WETH was used to buy Threshold Network (T) on Curve before it was sold on Balancer in a myriad of single-block transactions.
The total profit before fees was $33, however, it incurred almost $30 in transaction and protocol fees, leaving a net profit of $3.24.
Flash loans have been used nefariously in the past, with a string of flash loan exploits on decentralized finance (DeFi) platforms like Platypus and 0VIX resulting in losses exceeding $10 million.
Sourced from cryptonews.net.
