As of this article, the contest is nearly half way through with the enthusiastic response from the Timeswap community — more than 8000 participants. However, from my pov, most of the participants are newbies. They only really know the platform when the contest is held and haven’t thoroughly studied documents and operation of the platform. Therefore, at the beginning of gamefied testnet, they are the object of influence and exploitation by degens a lot via different arbitrage strategies.

Although most of the participants got up to the competition after a few days, the initial advantages are too great to be narrow for new contestant and opportunity to take advantage of strategy is also no longer to be effective as people become more knowledgeable.

It’s important to note that this is a contest and rewards are only for 10 winners. “The only free cheese is in the mousetrap” so instead of following the instructions or calls by someone you don’t know in the contest guide and support channels, improve your own knowledge and apply it in the competition because this experience may profit you after the contest or when the mainnet launches.

In this ariticle, from the perspective of a newcomer to the contest and also protocol, I would like to share my understanding of arbitrage strategy, the knowledge you need to know to be able to arbitrage and how to apply it in Timeswap.

Before coming to the application of Arbitrage in the competition, I hope you can take time to read through below articles for necessary knowledge:

https://timeswap.medium.com/timeswap-101-a-simplified-explainer-fe098a2ec378

https://media.giphy.com/media/8dYmJ6Buo3lYY/giphy.gif

If you’ve taken the time to read it, that’s great. If no, I will summarize some important concepts you need to keep in mind:

Arbitrage — the simultaneous buying and selling or borrowing and lending of the same asset in different markets in order to benefit from price inefficiencies.

APR — Annual Percentage Rate is the expected yearly interest to be paid by a borrower or the expected yearly yield received by the lender.

CDP — For a borrower, it is the amount of collateral locked per unit of asset borrowed. For a lender, it is the collateral coverage per unit of asset lent.

Undercollateralization — Borrowers take advantages of price inefficiencies from pools (CDP < 100%). They can lend the same asset into another pool which is sufficiently collateralized or make profit from the difference between the value of the borrowed assets and the value of the collateral by getting default.

OK! Let’s move on to next step. I would like to share my way of arbitraging so you can understand the above concepts easier.

Actually there will be many different arbitrage strategies, so I’m going to share the basics of what I do and the tools I use to maximize my capital.

Firstly, each user will only receive 10,000 TS-USDC, so you will have 2 options: LENDING or BORROWING

For lending, if you lend all your capital, it will be locked for the rest of the week. In addition, most lenders are attracted by APR which can be dramatically changed without regarding to the value of insurance assets they will receive if the borrower defaults. This is a common mistake made by new contestants at the beginning.

This leads to capital inefficiencies for lenders but it opened great opportunities to arbitrage for borrowers.

For borrowing, you will receive assets you want to borrow when you have enough collaterals which will be locked as required in pools. And borrowers took advantage of the amount of tokens they could borrow which was greater than the amount of tokens they had to mortgage.

In this case, borrowers don’t care about the amount of debt at repay and being ready to default to be able to take advantage of the borrowed assets for more arbitrage transactions like this. The example of below pool will help you better visualize this method:

As you can see, the value of collateral to lock at the time of this article is 986.21 $TS-DOGE ~ $177.44; while the value of borrowed token is 5 280 000 $TS-SHIB ~ $179.89 which is greater than value of locked collateral. Therefore, borrowers will have opportunity to arbitrage this pool.

For me, I also use this method to optimize capital and also know that there are masters who was applying this even more effective than me. So my guide will not talk about my achievement, I will focus on how I did it.

First of all, Timeswap admins mentioned that the data on the price of tokens in the contest will be extracted from Coingecko API so I used the website as a tracking tool. Moreover, Coingecko is also very convenient when you can convert the rate of any token right in the details of that token.

Coingecko users can use swap feature on website to calculate exchange rates between tokens

The market during the contest is quite volatile and the price parameters are calculated in real time. Additionally, I don’t always have free time to follow the market movements. To secure my capital, I usually convert all to USDC after arbitraging and keep looking for the next arbitrage opportunity when I’m free or there is the existence of a good position. I’m very limited in lending my capital because it will be locked for the whole week.

From a newbie’s point of view, I hope that what I share in the article will help you understand better the contest in particular as well as the platform in general. It should also be noticed that the transaction fee in the contest is not too large to consider, so participants can easily arbitrage. When Timeswap main net is lauched in the future, users will have to calculate and balance between transaction fees and arbitrage opportunities if they don’t want their alpha become underperformance.

That is all for now, level 2 contest will start soon and let me know what you think, join Timeswap community to to be able to update the latest news about the Gamefied Testnet!

Twitter: https://twitter.com/TimeswapLabs

Discord: http://discord.gg/timeswap

Telegram: http://t.me/timeswap

Youtube: https://www.youtube.com/channel/UCY8rACVXfPNP-P3M0cCvuEw

As of this article, the contest is nearly half way through with the enthusiastic response from the Timeswap community — more than 8000 participants. However, from my pov, most of the participants are newbies. They only really know the platform when the contest is held and haven’t thoroughly studied documents and operation of the platform. Therefore, at the beginning of gamefied testnet, they are the object of influence and exploitation by degens a lot via different arbitrage strategies.

Although most of the participants got up to the competition after a few days, the initial advantages are too great to be narrow for new contestant and opportunity to take advantage of strategy is also no longer to be effective as people become more knowledgeable.

It’s important to note that this is a contest and rewards are only for 10 winners. “The only free cheese is in the mousetrap” so instead of following the instructions or calls by someone you don’t know in the contest guide and support channels, improve your own knowledge and apply it in the competition because this experience may profit you after the contest or when the mainnet launches.

In this ariticle, from the perspective of a newcomer to the contest and also protocol, I would like to share my understanding of arbitrage strategy, the knowledge you need to know to be able to arbitrage and how to apply it in Timeswap.

Before coming to the application of Arbitrage in the competition, I hope you can take time to read through below articles for necessary knowledge:

https://timeswap.medium.com/timeswap-101-a-simplified-explainer-fe098a2ec378

https://media.giphy.com/media/8dYmJ6Buo3lYY/giphy.gif

If you’ve taken the time to read it, that’s great. If no, I will summarize some important concepts you need to keep in mind:

Arbitrage — the simultaneous buying and selling or borrowing and lending of the same asset in different markets in order to benefit from price inefficiencies.

APR — Annual Percentage Rate is the expected yearly interest to be paid by a borrower or the expected yearly yield received by the lender.

CDP — For a borrower, it is the amount of collateral locked per unit of asset borrowed. For a lender, it is the collateral coverage per unit of asset lent.

Undercollateralization — Borrowers take advantages of price inefficiencies from pools (CDP < 100%). They can lend the same asset into another pool which is sufficiently collateralized or make profit from the difference between the value of the borrowed assets and the value of the collateral by getting default.

OK! Let’s move on to next step. I would like to share my way of arbitraging so you can understand the above concepts easier.

Actually there will be many different arbitrage strategies, so I’m going to share the basics of what I do and the tools I use to maximize my capital.

Firstly, each user will only receive 10,000 TS-USDC, so you will have 2 options: LENDING or BORROWING

For lending, if you lend all your capital, it will be locked for the rest of the week. In addition, most lenders are attracted by APR which can be dramatically changed without regarding to the value of insurance assets they will receive if the borrower defaults. This is a common mistake made by new contestants at the beginning.

This leads to capital inefficiencies for lenders but it opened great opportunities to arbitrage for borrowers.

For borrowing, you will receive assets you want to borrow when you have enough collaterals which will be locked as required in pools. And borrowers took advantage of the amount of tokens they could borrow which was greater than the amount of tokens they had to mortgage.

In this case, borrowers don’t care about the amount of debt at repay and being ready to default to be able to take advantage of the borrowed assets for more arbitrage transactions like this. The example of below pool will help you better visualize this method:

As you can see, the value of collateral to lock at the time of this article is 986.21 $TS-DOGE ~ $177.44; while the value of borrowed token is 5 280 000 $TS-SHIB ~ $179.89 which is greater than value of locked collateral. Therefore, borrowers will have opportunity to arbitrage this pool.

For me, I also use this method to optimize capital and also know that there are masters who was applying this even more effective than me. So my guide will not talk about my achievement, I will focus on how I did it.

First of all, Timeswap admins mentioned that the data on the price of tokens in the contest will be extracted from Coingecko API so I used the website as a tracking tool. Moreover, Coingecko is also very convenient when you can convert the rate of any token right in the details of that token.

Coingecko users can use swap feature on website to calculate exchange rates between tokens

The market during the contest is quite volatile and the price parameters are calculated in real time. Additionally, I don’t always have free time to follow the market movements. To secure my capital, I usually convert all to USDC after arbitraging and keep looking for the next arbitrage opportunity when I’m free or there is the existence of a good position. I’m very limited in lending my capital because it will be locked for the whole week.

From a newbie’s point of view, I hope that what I share in the article will help you understand better the contest in particular as well as the platform in general. It should also be noticed that the transaction fee in the contest is not too large to consider, so participants can easily arbitrage. When Timeswap main net is lauched in the future, users will have to calculate and balance between transaction fees and arbitrage opportunities if they don’t want their alpha become underperformance.

That is all for now, level 2 contest will start soon and let me know what you think, join Timeswap community to to be able to update the latest news about the Gamefied Testnet!

Twitter: https://twitter.com/TimeswapLabs

Discord: http://discord.gg/timeswap

Telegram: http://t.me/timeswap

Youtube: https://www.youtube.com/channel/UCY8rACVXfPNP-P3M0cCvuEw