A Uniswap user was able to profit $40,000 thanks to $2 million of slippage and the price of Ether surging north of 15%.
It all started with a trader using $45k worth USDC to borrow another $405k USDC to have a total of $450k USDC.
This $450k USDC was then traded for $492k USDT on Uniswap only to trade $492 USDT for $492 USDC on Curve.
The user paid the $405k loan and ended up with $40k in profit after paying $2k in fees.
In this transaction, the user was able to get $492 USDT for $450k USDC because of the $15 million worth of Ether bought by someone on Uniswap. This pushed the price of ETH to jump to nearly $450, on Uniswap’s ETH/USDC market.
“This ETH is already on the move to what appears to be Binance. The USDT to buy the ETH came from Huobi originally,” noted @econoar.
This event resulted in the volume of ETH/USDC and ETH/USDT to skyrocket on the popular DEX.
After a series of swaps totaling about $18 million in USD to buy just over 40,000 ETH, the price of Ether went back to normal levels on Uniswap.
“This will attract the sharpest, hungriest minds globally to the ecosystem is self-evident,” commented Su Zhu, CEO and CIO of Three Arrows capital on this incident.
“A kid sitting anywhere in the world with zero wealth can participate in arbitrage trading via flash loans, at the same scale as the most well-heeled and brand-named corporations,” he said.
Uniswap, the DEX which is the center of this event, has been growing like crazy in 2020. As we reported, recently it raised $11 million in Series A funding round led by Andreessen Horowitz for the development of Uniswap V3 which will “dramatically increase the flexibility and capital efficiency of the protocol.”
On August 10th, the exchange recorded a volume of $193 million which is higher than Gemini’s $35 million, Poloniex’s $45 million, and Bitfinex’s $140 million. Uniswap is now reaching towards Kraken’s $267 million and Coinbase Pro’s $580 million, as per CoinGecko.