arbitrage opportunities when DUSD was at a 30% premium. my notes as follows:
create vault -
take DUSD out - (mint) ---> the vault has a negative interest rate ( you are paid to borrow DUSD, b/c DUSD > 1 )
sell DUSD on DEX -
then the DFI you get,
put DFI into the vault -
wait for DUSD to drop to 1 to get back the arbitrage ( around 35% ROI.)
buy back DUSD and close the loan
Does the steps sound right? The variable here is that we do not know when DUSD will converge to 1. What are the dynamics for it to converge? More people minting DUSD, thereby increasing the supply relative to USDC and causing the price to drop?
Dfip = Defichain improvement proposal The steps are spot on assuming the proposal works as intended
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