1. CRYPTO ARBITRAGE

This is probably one of the most favorable trading opportunities for cryptocurrency trading algorithms. With arbitrage, we are trying to take advantage of market mispricing and earn a risk-free profit.

There are many arbitrage opportunities in the markets that exist on exchanges and even within them. We won't go into all the strategies.

Arbitrage opportunities are trades that exist precisely because not many people are trying to take advantage of them. There is low competition from other trading algorithms, which makes it more profitable for the first to enter the market.

Likewise, to take advantage of these opportunities, we must act quickly. They usually last for only a few seconds before the market realizes mispricing and closes the gap.

In the cryptocurrency market, arbitrage trading is often the most profitable arbitrage trading between currencies on multiple exchanges. For example, they may be trading undervalued Ripple on BitFinex and the Binance exchange.

This would require the bot developer to have an account with both exchanges and link orders from the algorithm to their API system.

Some bots can take advantage of mispricing on the exchange itself.

Here is an example of a potential triangle arbitrage that an algorithm could enter. As you can see, there is a mispricing of the prices of Litecoin (LTC), Bitcoin (BTC), and Ethereum (ETH) on the Kraken Exchange.

What is likely to happen in this case is that the mispricing will only last for a few seconds and bots that can detect it and execute trades will reap the rewards. These algorithms will scan the Kraken order book in milliseconds to determine the slight increase.

2. ROUTING POOL

We often want to know the shortest/fastest path between two points. This is a well-known problem in graph theory. Several algorithms solve this problem: A*, Dijkstra, etc.

Determining the fastest processing algorithm to find the difference between pools is the advantage of bunnybot. Bunnybot builds programs based on proven algorithms and works well. At the same time, the server system that the metanode operates throughout helps the execution process reach the highest frequency.