🔀Arbitrage

Utilize the arbitrage tool to execute your option and make an arbitrage trade to take in profits.

Arbitrage describes the act of buying a security in one market and simultaneously selling it in another market at a higher price

Anyone can easily utilize Wasabi to make arbitrage trades and generate significant profits. When an option is ITM, the asset can be traded between Wasabi, the option holder, and the market to instantly make a profit in a single transaction.

If the option holder doesn't want to purchase & hold the asset while trading between markets, they can utilize our arbitrage smart contract to instantly swap the assets between markets and take the difference in profit.

Example Scenario:

Someone buys a Moonbirds PUT option with a strike price of 8 ETH and the floor price drops to 7 ETH after the purchase. Now, the option holder can submit the Wasabi arbitrage transaction and instantly take in the 8-7= 1 ETH profit.

Here is how it works;

1. A flash loan is taken out,

2. 1 Moonbirds token is purchased from Opensea from the 7 ETH floor price,

3. The PUT Option is exercised and the Moonbirds token is sold to the Wasabi Pool for 8 ETH,

4. 7 ETH is paid out for the flash loan and the remaining 1 ETH is taken as a profit by the option holder.

A Call option arbitrage trade will work the same way, except that the token is purchased from the Wasabi Pool and sold to Opensea or a different marketplace.

You can access this arbitrage tool from any options view (My Options or a detail page of an option).

Accessing the Arbitrage tool

Example Arbitrage Trade