Strategy · Arbitrage

CROSS-EXCHANGE STABLECOIN ARB

NeutralDefined riskAdvanced

Overview

Buy a stablecoin where it trades below peg and sell it where it trades above peg. Captures small but consistent spreads in stressed market conditions.

Setup

1.Maintain pre-funded balances on 3+ exchanges to avoid withdrawal delays.
2.Monitor stablecoin prices in real time across venues.
3.Trigger trade when spread exceeds estimated round-trip cost (typically 25-50bps).
4.Execute simultaneously to lock in the spread.
5.Rebalance balances weekly to keep dry powder distributed.
6.Monitor depeg risk — pause if a stablecoin trades >1% off peg.

Max profit

Captured spread × turnover; 5-15% APR achievable with active management.

Max loss

Stablecoin depeg, exchange insolvency, or transfer hangs.

Breakeven

Spread captured > round-trip fees and friction.

When to use

During market stress when stablecoin demand fragments across venues.

When to avoid

On illiquid venues, smaller stablecoins, or with capital you cannot afford to lock up.