Subscribe to the gold package and get unlimited access to Shamra Academy
Register a new userJack The Rippler: Arbitrage on the Decentralized Exchange of the XRP Ledger
71
0
0.0
(
0
)
Added by
Jiahua Xu
Publication date
2021
fields
Informatics Engineering
and research's language is
English
Ask ChatGPT about the research
No Arabic abstract
The XRP Ledger (XRPL) is a peer-to-peer cryptographic ledger. It features a decentralized exchange (DEX) where network participants can issue and trade user-defined digital assets and currencies. We present Jack the Rippler, a bot that identifies and exploits arbitrage opportunities on the XRPL DEX. We describe the Jacks arbitrage process and discuss risks associated with using arbitrage bots.
rate research
Read More
The prosperity of the cryptocurrency ecosystem drives the needs for digital asset trading platforms. Beyond centralized exchanges (CEXs), decentralized exchanges (DEXs) are introduced to allow users to trade cryptocurrency without transferring the custody of their digital assets to the middlemen, thus eliminating the security and privacy issues of CEX. Uniswap, as the most prominent cryptocurrency DEX, is continuing to attract scammers, with fraudulent cryptocurrencies flooding in the ecosystem. In this paper, we take the first step to detect and characterize scam tokens on Uniswap. We first collect all the transactions related to Uniswap exchanges and investigate the landscape of cryptocurrency trading on Uniswap from different perspectives. Then, we propose an accurate approach for flagging scam tokens on Uniswap based on a guilt-by-association heuristic and a machine-learning powered technique. We have identified over 10K scam tokens listed on Uniswap, which suggests that roughly 50% of the tokens listed on Uniswap are scam tokens. All the scam tokens and liquidity pools are created specialized for the rug pull scams, and some scam tokens have embedded tricks and backdoors in the smart contracts. We further observe that thousands of collusion addresses help carry out the scams in league with the scam token/pool creators. The scammers have gained a profit of at least $16 million from 40,165 potential victims. Our observations in this paper suggest the urgency to identify and stop scams in the decentralized finance ecosystem.
Bitcoin brings a new type of digital currency that does not rely on a central system to maintain transactions. By benefiting from the concept of decentralized ledger, users who do not know or trust each other can still conduct transactions in a peer-to-peer manner. Inspired by Bitcoin, other cryptocurrencies were invented in recent years such as Ethereum, Dash, Zcash, Monero, Grin, etc. Some of these focus on enhancing privacy for instance crypto note or systems that apply the similar concept of encrypted notes used for transactions to enhance privacy (e.g., Zcash, Monero). However, there are few mechanisms to support the exchange of privacy-enhanced notes or assets on the chain, and at the same time preserving the privacy of the exchange operations. Existing approaches for fair exchanges of assets with privacy mostly rely on off-chain/side-chain, escrow or centralized services. Thus, we propose a solution that supports oblivious and privacy-protected fair exchange of crypto notes or privacy enhanced crypto assets. The technology is demonstrated by extending zero-knowledge based crypto notes. To address privacy and multi-currency, we build a new zero-knowledge proving system and extend note format with new property to represent various types of tokenized assets or cryptocurrencies. By extending the payment protocol, exchange operations are realized through privacy enhanced transactions (e.g., shielded transactions). Based on the possible scenarios during the exchange operation, we add new constraints and conditions to the zero-knowledge proving system used for validating transactions publicly.
In this paper we present the initial design of Minerva consensus protocol for Truechain and other technical details. Currently, it is widely believed in the blockchain community that a public chain cannot simultaneously achieve high performance, decentralization and security. This is true in the case of a Nakamoto chain (low performance) or a delegated proof of stake chain (partially centralized), which are the most popular block chain solutions at time of writing. Our consensus design enjoys the same consistency, liveness, transaction finality and security guarantee, a de-facto with the Hybrid Consensus. We go on to propose the idea of a new virtual machine on top of Ethereum which adds permissioned-chain based transaction processing capabilities in a permissionless setting. We also use the idea of data sharding and speculative transactions, and evaluation of smart contracts in a sharding friendly virtual machine. Finally, we will briefly discuss our fundamentally ASIC resistant mining algorithm, Truehash.
The Global Financial Crisis of 2008, caused by the accumulation of excessive financial risk, inspired Satoshi Nakamoto to create Bitcoin. Now, more than ten years later, Decentralized Finance (DeFi), a peer-to-peer financial paradigm which leverages blockchain-based smart contracts to ensure its integrity and security, contains over 702m USD of capital as of April 15th, 2020. As this ecosystem develops, it is at risk of the very sort of financial meltdown it is supposed to be preventing. In this paper we explore how design weaknesses and price fluctuations in DeFi protocols could lead to a DeFi crisis. We focus on DeFi lending protocols as they currently constitute most of the DeFi ecosystem with a 76% market share by capital as of April 15th, 2020. First, we demonstrate the feasibility of attacking Makers governance design to take full control of the protocol, the largest DeFi protocol by market share, which would have allowed the theft of 0.5bn USD of collateral and the minting of an unlimited supply of DAI tokens. In doing so, we present a novel strategy utilizing so-called flash loans that would have in principle allowed the execution of the governance attack in just two transactions and without the need to lock any assets. Approximately two weeks after we disclosed the attack details, Maker modified the governance parameters mitigating the attack vectors. Second, we turn to a central component of financial risk in DeFi lending protocols. Inspired by stress-testing as performed by central banks, we develop a stress-testing framework for a stylized DeFi lending protocol, focusing our attention on the impact of a drying-up of liquidity on protocol solvency. Based on our parameters, we find that with sufficiently illiquidity a lending protocol with a total debt of 400m USD could become undercollateralized within 19 days.
We investigate triangular arbitrage within the spot foreign exchange market using high-frequency executable prices. We show that triangular arbitrage opportunities do exist, but that most have short durations and small magnitudes. We find intra-day variations in the number and length of arbitrage opportunities, with larger numbers of opportunities with shorter mean durations occurring during more liquid hours. We demonstrate further that the number of arbitrage opportunities has decreased in recent years, implying a corresponding increase in pricing efficiency. Using trading simulations, we show that a trader would need to beat other market participants to an unfeasibly large proportion of arbitrage prices to profit from triangular arbitrage over a prolonged period of time. Our results suggest that the foreign exchange market is internally self-consistent and provide a limited verification of market efficiency.
Log in to be able to interact and post comments
comments
Fetching comments
Sign in to be able to follow your search criteria
