What Are the Most Common Types of Arbitrage in Cryptocurrency Markets?
The most common types of crypto arbitrage include cross-exchange arbitrage, triangular arbitrage, and decentralized arbitrage. Cross-exchange arbitrage involves buying a cryptocurrency on one exchange and selling it on another where the price is higher.
Triangular arbitrage exploits price discrepancies between three different cryptocurrencies on the same exchange. Decentralized arbitrage takes advantage of price differences between decentralized exchanges (DEXs).
Finally, flash loan arbitrage is a more complex strategy that involves borrowing and repaying a large amount of cryptocurrency in a single transaction to exploit price differences in DeFi protocols.