The Opportunity
Stablecoins like USDC and USDT are pegged to $1 but trade at slightly different prices on different blockchains due to liquidity imbalances, bridge latency, and local demand/supply.
When USDC on Base trades at $1.003 while USDC on Optimism trades at $0.999, there's a 0.4% corridor available for arbitrage.
The Math
For a $500 trade:
- Gross profit: $500 × 0.004 = $2.00
- MangoSwap fee (0.03%): $0.15
- Bridge fee (0.25%): $1.25
- Gas (~$0.20): $0.20
- Net profit: $2.00 − $1.60 = $0.40
Across 10 trades/day, this compounds to $4/day or ~$1,460/year on $500 capital — a 292% annual return in an ideal scenario.
Risk Profile
Stablecoin arb is considered low risk because:
- Both sides of the trade are stablecoins (no directional exposure)
- Maximum loss is the fee structure if the spread closes before execution
- The Drawdown Limit setting caps total losses automatically
Configuration Tips
- minDeviationPct: Start at 0.3% to balance frequency vs. profitability
- tradeUsd: Larger trades magnify profits but also fees
- chains: Add Polygon for higher frequency opportunities