Why Is Low Latency Essential for Successful Triangular Arbitrage Bots?
Triangular arbitrage opportunities are fleeting, often lasting only milliseconds, as other high-speed bots quickly exploit and close the price gap. Low latency ensures the arbitrage bot receives market data quickly and can submit the transaction to the blockchain rapidly.
Any delay increases the risk of the transaction failing or being front-run, leading to a loss of the gas fee paid.
Glossar
Essential Liquidity Provision
Provision ⎊ Essential liquidity provision refers to the process of supplying sufficient assets to a market to ensure smooth and efficient trading.
Non Essential Data Modification
Context ⎊ Modification is considered non-essential when altering data elements that do not impact the fundamental validation logic or the resulting state change of the ledger.
Essential Asset Protection
Mitigation ⎊ Essential asset protection involves implementing strategic measures to mitigate financial and operational risks associated with holding digital assets.
Essential Digital Assets
Foundation ⎊ Essential digital assets form the financial foundation of the entire cryptocurrency ecosystem, serving as the primary unit of account and the most liquid base layer for all other instruments.
Successful Project History
Outcome ⎊ A Successful Project History documents the verifiable outcomes of an advisor's past engagements, particularly those involving the development or deployment of complex trading strategies for options and crypto derivatives.
Latency Arbitrage Detection
Detection ⎊ Latency Arbitrage Detection is the systematic process of identifying trading strategies that exploit minute time differences in market data dissemination or order processing across various crypto venues.
Latency Arbitrage Risk
Exploitation ⎊ Latency arbitrage risk in cryptocurrency derivatives arises from the temporal discrepancies in price discovery across disparate exchanges and trading venues, creating opportunities for profit through rapid execution.
DeFi Option Arbitrage Bots
Bot ⎊ These specialized agents are designed for the autonomous detection and exploitation of pricing discrepancies within decentralized option markets.
Protocol Bots
Bot ⎊ Protocol bots are automated software programs designed to interact directly with decentralized finance protocols to execute specific financial strategies.
Latency Arbitrage Effectiveness
Metric ⎊ Latency arbitrage effectiveness is quantitatively measured by the frequency and magnitude of profitable trades executed by high-speed algorithms exploiting price discrepancies across venues.