top of page

A died token on Arbitrage life support.

Sometimes a token looks like it is still alive but in practice it is on life support, where the item keeping it alive is an arbitrage bot....


A good example of a token on life support is the PepeRun meme token on BTTC chain:

It was created on June 4, 2023 had some decent transactions untill June 23 and then it became connected to the Arbitrage Bot life support.


Was does this mean? It means it is listed on one of more DEX's with pairing with different tokens, who all have their own value that can drive apart from each other..


For example PepeRun got listed on Iswap. And it got listed against several different tokens:

In total we counted 13 pairs. So if for example the value of ETH goes up quicker then the value of BNB, it makes sense to buy some PRUN from the PRUN/BNB pair and sell it against the PRUN/ETH pair and you make some profit.


An Arbitrage bot is always looking for these opportunites which explains why there is still trading volume on a dead token.

As visible in the transaction overview, it results in a wide range of micro transactions continuously.


With every trade on a Dex though a small exchange fee is burdening the transaction. This results that slowly but steadily liquidity is pulled out of the liquidity pairs and with that it drains the value of the token over time. The expectation therefore is that the life support has a limited life expectancy and in the end the artificially beating heart of the token will stop beating in the end.

11 views0 comments

Recent Posts

See All

Comentarios


bottom of page