- Blockchain
- Web
- Cryptocurrency
- Fintech
- Trading
- Arbitrage
Arbitrage bot operating between South African and foreign crypto exchanges and enabling users to generate profit from cryptocurrency price discrepancies
Project goals
- 1
Develop a sophisticated trading bot with an intuitive UI that would operate between local and foreign exchanges and spot arbitrage spreads
- 2
Enable users from South Africa to profit from differences in BTC prices between markets and carry out risk-free transactions
- 3
Ensure support for BTC, USD, and ZAR
Work done
- Thoroughly carried out research phase
- Robust, custom-made trading platform with multi-user support and ability to conduct trades between the EU and South African markets
- Web platform helping users track and manage arbitrage opportunities
- Well-defined proprietary logic
- Profitable rates search algorithm
- Convenient admin panel
- Bot integration with the proposed exchanges and currency pairs
- Advanced system that quickly creates matching orders needed for the arbitrage operation without any restrictions imposed on the number of trades a user makes per day
Business opportunity
- Crypto trading has been on the rise in South Africa and shrewd investors are now making millions of rand from it.This phenomenon can be attributed to the fact that demand for BTC in South Africa exceeds supply and its price has been 3-4% higher compared to other international markets.
- As a result, it is much more profitable to buy Bitcoin low on a foreign exchange and sell it high on the local one.In cases like this, a reliable and fully-fledged crypto arbitrage trading system is needed to help traders quickly spot arbitrage spreads and receive maximum benefit from price discrepancies.
$25.8 mln
the amount of trading volume generated by South Africa in Q1 2021
*The country has been ranked as one of the top P2P Bitcoin trading nations on the African continent
150,000
user accounts and 50+ cryptocurrencies registered in VALR
*The most popular crypto exchange in South Africa
$145 mln
daily crypto asset trading values in South Africa*
*as of January 2021
Solution
Our team of quants and blockchain developers mapped out a comprehensive arbitrage strategy and developed a top tool with a clear UI, multi-user support, and full compliance with South African laws and regulations.
The solution allows users to seize arbitrage opportunities in the volatile crypto market, capitalize on BTC price discrepancies, and grow investments in the local currency (rands) via cross-border crypto arbitrage. Crucially, it provides trading services to users in a timely manner without restrictions imposed on the number of trades conducted per day.
Technologies used:
Details
Supported exchanges
To get started with arbitrage trading, the user is required to integrate the bot with the crypto exchanges’ APIs.The developed bot operates between Binance (foreign) and VALR (local) exchanges, which were chosen based on the following factors:
- The capabilities of the created trading bot
- The trading volume of the exchanges
- KYC & AML regulations
Support for each of these exchanges includes:
- Integration with the exchange via its API / WebSocket connection
- Placement and execution of trading orders by the bot
- Transfer of coins/fiat money from one exchange to another
- Opportunity to view the orders and trading history of the authenticated exchange account
Regulatory aspects
In South Africa, all foreign investments are regulated by the government. That is why when registering in the system, the user is obliged to follow a link where they will be asked to fill in a special form and submit it to Currency Partners — a financial services provider licensed by the FSCA and the SARB.The organization will help attend to regulatory requirements, deal with the tax clearance certificates, and initiate the payment to Binance on behalf of the client using the API and the client’s Binance reference (account number).
Risk management
The parameters for crypto trading can be set in the admin panel. It’s possible to specify the desired profit percentage of the arbitrage operation as well as the minimum trading amount. Once the given parameters have been met, the crypto trading bot will be able to execute the transaction and the user will get the profit.
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How it works
The most extraordinary thing about the solution is that it is perfectly capable of instantaneously detecting profit signals according to the percentage value of the potential profit and automatically conducting a transaction on behalf of the user.
Here is what the process looks like:
1
The user registers in the system
To register in the system, the user has to open a foreign exchange bank account in their own name, configure Binance’s and VALR’s APIs, and set up a withdrawal account in VALR to which they will withdraw their funds. The bot is now ready to work.
2
The user logs in to the system
To log in, the user is required to enter their email and password and undergo two-factor authentication via Google Authenticator (if it is enabled).
3
The bot checks if there is a minimum trading amount of USD in the foreign exchange account
The minimum sum needed to execute a trade is 250,000 ZAR (in USD equivalent), though this can be changed in the admin panel.
4
The bot gets down to checking and comparing order books from both Binance and the local exchange and searching for arbitrage opportunities
The sophisticated backend mechanisms allow the bot to quickly check orders from the two exchanges against each other for potential profitability.
5
Once an arbitrage opportunity has been spotted, the bot sells USD and buys BTC on Binance
The system creates the matching orders required for the arbitrage operation. Afterwards, the bot sends the commission (25% from the arbitrage transaction profit) to the customer’s commission wallet address. The rest of the BTC goes to the user’s VALR account.
6
The bot sells BTC and buys ZAR on VALR
Once the purchase has been made, the bot sends ZAR to the foreign exchange bank account (only the amounts of ZAR that are part of the arbitrage transaction).
7
The bot either continues performing orders or stops
Upon successful completion of the transaction, the user can top up their Binance balance to repeat the bot flow. Or, they may choose not to do so — hence, the bot won’t be able to perform another transaction.
Thanks to the exquisite algorithms that lie at its core, the bot manages to spot arbitrage opportunities in the blink of an eye and carry out a trade at lightning speed.
The user can just sit back, relax, and generate profit with a couple of taps on the screen.
Project features
- Automated crypto arbitrage trading
- Custom-made strategy
- Blazing-fast performance speed
- Well-thought-out strategy of transaction distribution among users
- Arbitrage value stats chart which shows the best arbitrage opportunity per day
- Absence of any limitations on the number of trades to be conducted by the bot
- Two-factor authentication via Google Authenticator as an additional layer of security
- Attractive and consistent UI
- 24/7/365 access
- Detailed and relevant information about the bot’s functionality with pop-up notifications and FAQ section
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