What is Cross-Chain Arbitrage?
Cross-chain arbitrage involves exploiting price differences for the same asset across different blockchains. When ETH trades at $2,000 on Ethereum but $2,010 on Arbitrum, arbitrageurs can buy on one chain and sell on the other for profit.
How It Works
- Monitor prices across multiple chains simultaneously
- Identify significant price discrepancies
- Bridge assets to the cheaper chain
- Buy on the cheap chain, bridge to expensive chain
- Sell for profit (minus bridge and gas fees)
Key Considerations
Speed: Opportunities disappear quickly; automated bots dominate Fees: Bridge fees and gas must be lower than price difference Risk: Bridge delays can eliminate profits or cause losses Capital: Need funds on multiple chainsGetting Started
- Set up wallets on target chains
- Use fast bridge aggregators (Li.Fi, Socket)
- Monitor with price aggregators
- Start with small amounts to understand timing
Track arbitrage opportunities with Fensory.