📈Arbitrage & Volatility Farming

Arbitrage

Arbitrage involves the simultaneous buying and selling of the same asset in different markets or forms to capitalize on price differences and earn a profit.

Volatility Farming

Volatility Farming leverages the ongoing fluctuations in asset prices, with users and MEV bots always on the lookout for arbitrage chances to earn swift profits. The protocol introduces these opportunities by creating a secondary market through the use of potions. This setup allows arbitrageurs to exploit price variances between identical assets, generating arbitrage opportunities. Specifically, for potions, arbitrage chances arise whenever there's a significant price gap between TKN and LTKN, exceeding the costs associated with either wrapping or unwrapping. Engaging in these opportunities through potions leads to the collection of protocol fees, which are then allocated according to the specific potion setup.