How our team makes millions in crypto risk-free

Exploiting crypto markets for fun and profit

For the last year, we’ve been running profitable strategies in crypto, with very attractive risk structures. I gave a small taste of that in my first post, where I described a strategy that made around 2-3% in a week with close to no risk:

Anatomy of a Yield Farm

We’ve been very busy since then and I didn’t have a chance to write a follow-up post until now. Here I’ll describe some of the best strategies we’ve run since then and what we’re currently focusing on. Note: nothing in this post is financial advice, please read through the disclaimers later on.

NFT Sniping

Around August, NFTs (non-fungible tokens - basically art on the blockchain) started really taking off. Opensea, the top secondary marketplace for NFTs, started doing $3 billion volume monthly. Because the market exploded overnight, it was super inefficient at first. There were many new NFT launches that would instantly be worth significantly over “mint price” - typically, they would sell for a little under .1 eth at mint (initial sale) and then the market would move to .3-5+ eth “floor” right after the mint sold out. This all took place on the Ethereum blockchain, which has a gas auction system to prioritize transactions. People would “burn” lots of eth in order to get transactions through, in what became known as the “gas wars” (see e.g. ). An NFT might cost .1 eth, but people would pay .3-4 eth on top of that to get their purchase transaction confirmed before it sold out. This got bad enough that Vitalik started proposing alternative ways to launch NFTs.

Enter Eden network. They launched the Eden token, and had partnerships with miners that guaranteed priority for anyone staking Eden token over everyone else - no matter what gas price you paid. They launched in the beginning of August and were severely underutilized at first. We were able to be the largest minter in many NFT projects - 0n1 Force, Gevols, and several others, all while paying significantly less than everyone else. We ran a relatively simple bot that would spam transactions with minimal fees right when the project launched and get as many as we could confirmed.

Huhao @HuhaoNFT

So, about @0n1Force's drop yesterday. A single whale minted 217 tokens, all of which were consecutive numbers. This whale was 0x3bf2922f4520a8ba0c2efc3d2a1539678dad5e9d. Oh and guess what? The total tx fee was less than 0.3 ETH for every 7 that he got. A cost basis of 0.12 ETH

KidEight.eth 💎 😇 😈 @_KidEight

12/ WHALE BOTS. At mint there were 3 accounts that managed to collect between 300-400 mints. The General sale was capped at 10 per tx. I decided not to cap the max per wallet as naively i didnt expect this to happe. I was told at mint Pranksy has 1200 apes and that want an issue

Over a period of around 3 weeks and 100 lines of Python, we printed over 2M of profit. Then a few things happened:

1. Other people started staking massive amounts of Eden, so we couldn’t compete (one whale had several million dollars worth of Eden; the same whale later went on to launch the OpenDAO SOS airdrop, but that’s another story.)

2. Projects started including stricter limits and anti-bot protections, making it much more difficult to scale minting

3. Eventually, Eden nerfed the gas price feature, and even before then some of the miners were dropping Eden transactions during the gas wars, making it far less useful.

The biggest value in these opportunities is in being early. We didn’t have the best bots, but for the first few weeks we were the only players even trying to mint big using Eden. Lots of people, in theory, knew about it, but nobody else actually used the alpha to make millions during that timeframe. This was super low risk because we only minted the most popular NFTs - another member of the team did research, looking at presale activity, social media sentiment, etc to know which ones were sure bets. I think we minted around ten projects during this time and made money on all of them. Because we were paying significantly less than others, there was very little risk - if we paid .15 eth and most minters paid .3-4 it was extremely unlikely for the secondary price to drop below .15.

AMPL Borrow

Amplforth is a rebase token, meaning the amount you hold in your wallet changes on a daily basis. Once a day, depending on the average price over the last day, it can either go upwards or downwards, typically by a few percent. You can see the rebase history here.

In other words, if the rebase rate is +7.28 as it was on Nov 2nd, and you had 100k AMPL tokens before the rebase, you would have 107,280 AMPL tokens afterwards. If the rebase was negative, you’d have fewer tokens afterwards.

Around Oct 30, I noticed that there was an opportunity to borrow AMPL on AAVE (a lending platform for crypto tokens). Because of the interest rate curve, the highest rate you would need to pay was roughly 186k APY, or 2.08%/day. On days when the rebase was more than that, it was risk-free profit - substantially so. There were 4 days in a row of over 6% rebases, and another week of lower but profitable rebases until it stopped.

Avraham Eisenberg @avi_eisen

turns out the trade this month is paying 186k APY for as large size as you can get. IYKYK

This opportunity was significantly scalable - we successfully deployed over 5M of capital during this period and enjoyed roughly 1M in practically risk-free profits. (The only real risk was a large ampl price increase leading to liquidation and price dropping again leaving you with the bag.) Near the end, it got much more competitive to borrow - we needed to run bots to borrow as soon as it became available. We were the largest borrower, controlling maybe 20% of the borrow of AMPL on AAVE at peak. As with the NFT trades, most of the opportunity came from being early, when it was possible to borrow hundreds of thousands of AMPL manually, before the bots came in.

Miscellaneous trades

None of these were nearly as good (higher risk, less scalable, or both) as the two big ones above, but were all worth doing. I’m not going into detail on the smaller trades, just very broad outlines:

• Farmed Cover pools around Mar-Apr for 100-200% APR and a fairly low max loss because of the unique structure of the pool, moderately scalable

• Farmed Tower Finance for two days in Oct, made around 10% over those 2 days before it collapsed, max loss was around 3% based on the structure of the stablecoin LP

• A wide variety of farms that make significantly less, but are a good place to park capital while waiting for a homerun trade.

Call for alpha

We are focused on finding similar low risk opportunities that are scalable. If you have alpha and would like to partner, please reach out via DMs on Twitter, Facebook, or Discord. We have the skills to execute and the capital to maximize. It doesn't necessarily need to be in crypto, although these kind of low risk high return opportunities are probably fairly rare outside of crypto and are hard to find even in crypto.