The software architects of our company improved automation and eliminated obvious shortcomings and risks for the "synchronous inter-exchange arbitrage strategy".
For example: latency and slow exchange API, rate limit constraints, network latency (ping), slow server (VPS), weak price search algorithm, empty order book, and much more.
Systemic mitigation of these points for ARBCORE strategies:
Key components:
Technology: server near the exchange (colocation), high-precision data streams and powerful servers, WebSocket streams, direct order book reading, automated bots, API access. Such automation allows catching dozens of mini-trades daily, even at night and during volatility spikes.
Latency is the main enemy; delays in data transmission or execution reduce profit, so power and colocation play a decisive role.
Liquidity: both exchanges must have sufficient trading volume and filled order books for fast execution of large orders and use of split and counter orders.
Fees and slippage: exchange/network fees and price fluctuations during order execution reduce profit, therefore arbitrage is executed with large pools on fast tokens and low-fee networks, which minimizes any fees and increases profit.
Security: protection of API keys is critical.
For the ARBCORE arbitrage strategy, a clear risk management is established.
The bot monitors: max trade size, max slippage, minimum profitability, API limits, balances on all exchanges.
At the same time, it accounts for: trading fees, slippage, liquidity, network fees, API limits.
This allows executing only profitable trades. This makes the process stable and controlled.
Risks of exchange account blocking / KYC:
/Problem/ How it is addressed for ARBCORE automated bots:
• /too many API requests/ we process data from different sources simultaneously.
• /too fast orders/ eliminated by simple "execution" at the price level with different volumes, taking into account any counter orders.
• /constant deposit-withdrawal / transfers between licensed exchanges without third-party wallets, using different types of cryptocurrencies and pool volumes; simple trading without "price exploitation" and "fast bundles" does not violate trading conditions.
All ARBCORE exchange accounts are verified to a legal entity, have years of trading history, have certain VIP statuses and reduced transaction cost: –20%, all API requests are mostly kept from one server.
On all CEX exchanges, the strategy has been tested and shows itself in ARBCORE as a strategy of predictable and stable operation.
The more automation, the higher the stability, the fewer drawdowns, the fewer random errors, the easier it is to scale the strategy.
This is the foundation for a sustainable model that opens the possibility to document and show transparency.
The bot can automatically:
• store statistics of arbitrage trades, (TXID) of all blockchain transactions.
• log each trade and show real profitability with fee assessment: trading fees (0.04–0.2%), withdrawal fee, gas fee.
• return API data in JSON format containing order book data, price, quantity, time, type (limit, market) and status.
• create contracts, invoices and reports for investors.
• send arbitrage profit to users' wallets by automatically calling the smart contract.
This is very important — it increases trust in the system.
The next development step for ARBCORE is completing tests of arbitrage smart contracts for DEX arbitrage.
Arbitrage on DEX exchanges will be conducted inside fast blockchains on SWAPs, such as Solana, Near, Arbitrum, Polygon, Tron and others, to ensure fast smart contract invocation and protection from MEV bot front-running.
