Introduction

Stablecoins are instrumental in DeFi so that all blockchains including Solana should have a native stablecoin or integrate one from other blockchains.

However, stablecoins are double sward instruments since it breeds ground for arbitrage. Big size arbitrage rates on a pool hurt the healthy of the pools by increasing the impermanent loss of liquidity providers of the very pool.

This dashboard investigates stablecoin arbitrage on Jupiter and attempt to provide insight into how to mitigate it.

Analysis

Descriptives

The donut chart below shows the percentage of stbablecoin swaps with more than 1% yield(successful arbitrage) since February 1st 2022.

The graph below shows what stablecoin pairs where used for arbitrage with more than 1% profit. USDC-USDC where more frequent pair with the average higher yield.

Explanatory

The two graphs below look into intermediary tokens for arbitrage.

We can see what tokens are exploited for successful arbitrages. Shadow tokens received more attention and swaps involved Soldiers XSolvivor coin earned more yield on average.

The graph below shows how the number of successful arbitrage and arbitrage rate has changed over time.

The histogram below shows the distribution of arbitrage rate.

We can see vase majority of arbitrage yield were between 1.01 and 1,10 (101-110%).

Table below lists the top 20 arbitrages.

The list below shows the total yield received from arbitragers in February.

In this computation all successful and unsuccessful arbitrages has been taken into account. We can see that while some swaps yield high profit but on average the result is different.

The donut chart below shows that 40% of wallets that have had successful arbitrage received more than1% yield in total.

Summary of findings

• 5,66% of total stablecoin swaps since February 1st have resulted in more than 1% profit.

• The majority of successful arbitrages were based on USDC to USDC swap.

• We can not see the most profitable tokens are exploited most frequently for successful arbitrages. Shadow tokens is the top frequently pair token in successful arbitrages and swaps involved Soldiers XSolvivor coin resulted in more yield on average.

• All the arbitragers use bots as the total number of swaps is too high.

• 40% of arbitrages on average earned more than 1% yield.

Conclusion

Although some swaps results in very high yield, but this is not general trend. Also the arbitragers have many unsuccessful attempts that normally mitigate the total yield. The arbitragers also do not use high amount of money.

All in all the problem is not too crucial, however, it may be a real problem when the arbitrages concentrate on a pool.

I believe that limitation on bot activities on certain liquidity pools who are under attack can mitigate the problem.