Stablecoin Arbitrage

How It Works

When stablecoins trade at premium or discount (e.g. USDC $1.002 vs USDT $0.998), buy low and sell high. Profits are razor-thin (0.01%-0.1%), needing large capital and low fees to be profitable. But during depeg events (e.g. USDC dropping to $0.95), arbitrage windows temporarily widen.

Suitable Platforms

Suitable platforms: all major CEXs and DEXs. Stablecoin pairs often have ultra-low or zero fees, suitable for automated high-frequency operations.

Risk Level

Risk: Low. Stablecoins pegged to $1, minimal volatility in normal markets. Biggest risk is depegging — if the stablecoin you hold actually goes to zero, arbitrage becomes loss.

Common Pitfalls

• ⚠Too thin: 0.01%-0.05% profit in normal markets, may go negative after fees
• ⚠Depeg risk: many got trapped buying the dip during USDC 2023 depeg
• ⚠Capital requirement: needs six-figure USD for meaningful returns