Arbitrage

Cryptocurrency Trading Platform and Arbitrage Bot

  • Blockchain
  • Web
  • Cryptocurrency
  • FinTech

Cryptocurrency trading platform supporting the use of multiple arbitrage strategies, advanced crypto trading bot functionality and liquidity management.

Feb 2018 - June 2018

Work done

  • Crypto trading platform
  • Data collection mechanism
  • Profitable rates search algorithm
  • Cryptocurrency trading arbitrage bot
  • Ability to exchange fiat to crypto and vice versa
  • Tool for managing crypto volatility

Challenge

Cryptocurrency trading platforms help traders and casual investors to keep track of the changes in crypto value. However, volatility in prices, rates and commissions offered on various crypto exchanges and constantly changing market conditions make trading a challenging and tricky process. That is the reason why many tend to rely on arbitrage bots.

One of the perks of a good crypto arbitrage bot is that in order to make a profit, there is no need to keep money in the most volatile cryptocurrencies. To provide the most profit, the bot should be advanced and competitive in relation to other cryptocurrency bots. That’s why our team developed one of the best arbitrage trading platforms and arbitrage bots.

Project Goals:

  • Build a mechanism for data collection from crypto exchanges;
  • Provide an arbitrage trading tool that can assist users in making profitable transactions;
  • Maximize liquidity ratio and minimize risks associated with arbitrage trading;
  • Provide a convenient way to exchange fiat to crypto and vice versa;
  • Build a tool that helps to manage crypto volatility.

Solution

The arbitrage bot executes trading operations based on various indicators, including sale/purchase commissions and market price changes, interacting directly with exchanges, and placing/closing orders on the trader’s behalf.

How Crypto Arbitrage Platform Works

Trading is performed by arbitrage bot simultaneously buying and selling the same cryptocurrency amount from two different exchanges to gain a profit off the exchange rate difference. The transaction is carried out in a way that the cryptocurrency amount on both exchanges is equal to the amount before the transaction, while the equivalent amount in fiat is increased by the rate difference.

Ensuring Exchange Liquidity & Profitability

When the user makes a transaction, the arbitrage platform automatically makes a reverse transaction on another exchange so that the sum of funds on two exchanges remains the same. However, performing arbitrage trading can be risky because of the following factors:

  • Accumulation of all funds on one of the exchanges leading to a halt in trading;
  • Exchange losses caused by having to pay higher transaction commissions.

Our team developed a graph theory-based optimal search algorithm designed to avoid these risks and find profitable rates, functioning via an additional minor pair. Data is acquired from various exchanges, including Kraken, Bitfinex, Bittrex, Binance, and others. Exchanges are then made using the algorithm based on the data specified as parameters (sale/purchase commission, exchange rate difference, etc.).

The algorithm chooses the most beneficial trading deal and executes it before the market changes and opportunity passes by. The Arbitrage trading software makes instant decisions, leaving the user only to sit back and occasionally check account balance.

Features

  • Data acquisition from various exchanges (Kraken, Bitfinex, Bittrex, Binance, etc.)
  • Analysis of arbitrage trading profitability according to specified trading parameters (sale/purchase commissions, cost of transferring funds between exchanges, etc.)
  • Arbitrage trading settings (set the threshold value of deals and profitability, minimum volume for trading, etc.)
  • Expenses redemption via an additional order mechanism
  • Arbitrage trading both directly and through a minor pair
  • Opening and closing orders functionality
  • Arbitrage trading visualization: logs, statistics, notifications

Technologies

Node.js, MongoDB

Team

  • 2 C++ developers
  • 4 Full-Stack Developers
  • 2 QA Engineers
  • Project Manager

Duration

5 months

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