How Arbix Works
Last updated
Last updated
If you are new to arbitrage, please, read the "" part first for a better understanding on how Arbix operates.
Arbix is designed to democratize access to arbitrage opportunities by eliminating traditional barriers to entry, allowing the community to participate without needing complex technical setups. Users simply provide the necessary operational liquidity, while Arbix manages all aspects of the infrastructure, making arbitrage accessible to everyone.
Users contribute their liquidity to multi-chain liquidity pools, which Arbix leverages for both on-chain and cross-chain arbitrage operations. The Arbitrage Engine actively scans the markets, collects data essential for identifying profitable opportunities, executes the trades, and secures the profits. By distributing liquidity across multiple chains, Arbix is able to capitalize on a broader range of arbitrage opportunities, ensuring that its operations are both efficient and scalable.
In return for their liquidity contributions, users receive yield-bearing tokens, which not only represent their stake but also provide them with real yield generated from Arbix’s arbitrage activities. These tokens offer a tangible return on asset provision, reflecting the profits earned through Arbix’s sophisticated arbitrage strategies.
The Arbitrage Engine is the core component of Arbix, responsible for executing all arbitrage operations. The main functions of the Arbitrage Engine include: Opportunity Identification & Analysis, Execution and Profit Realization.
It comprises a sophisticated set of smart contracts, bots, and a secure off-chain infrastructure that collectively gather market data, analyze arbitrage opportunities, and execute trades. The engine is designed to maximize profitability by efficiently utilizing users' liquidity.
The Arbitrage Engine leverages cutting-edge technology and advanced algorithms to stay ahead in the highly competitive DeFi environment, ensuring users achieve optimal returns on their deposits.
Arbix arbitrage engine architecture can be split into a three-layer system, each corresponding to a step in executing arbitrage opportunities: Aggregation & Analysis, Execution, and Clearing. This process involves aggregation of data from the markets and its analysis based on arbitrage opportunities, their profitability, risks, and routing by a relevant algorithm. The analysis forms a transaction pool where identified arbitrage opportunities are gathered and prioritized. This is followed by an execution layer that executes the arbitrage opportunities via multi-chain liquidity pools, and a clearing layer that rebalances the pools post-execution.
Below is a diagram of how the Arbix Architecture is built:
Data Aggregation. Gathers information from various markets, including DeFi protocols, CEXs, Aggreg8 Dynamic Data Feeds, and the Quotex Unified Order Network.
Analysis. Analyzes the aggregated data to identify potential arbitrage opportunities, assessing their profitability, risks, and routing based on the relevant algorithm.
Transaction Pool Formation. Creates a transaction pool where identified arbitrage opportunities are gathered and prioritized, and ready for their execution.
Transaction Pool Sent for Execution. After the transaction pool is formed it is sent to the Execution Layer.
Transaction Execution. The transaction pool is sent to the execution layer, which performs the arbitrage by leveraging multi-chain liquidity pools.
Take Profit. Execution Layer goes to market to perform arbitrage leveraging Arbix Pools and takes profit.
Call of Clearing Layer. After execution, the Execution Layers calls Clearing Layer to start rebalance of liquidity pools, if needed under the construct of soft rebalance.
Clearing. If needed rebalances the liquidity pools to maintain optimal liquidity distribution.
Yield Distribution. Yield is distributed to users with Yield-Bearing assets.
