[UPDATE] – "a glimpse into the future" – the arbitrage bot 2.0
Nine days ago I made a post about the arbitrage bot I started running on the ETH/BTC pair: last post
The bot has been running for more than a week now. The volume was at first very promising as Spielley decided to run his bot with a spread of 0.2% on that pair to allow my bot to do more arbitrages. But that model wasn't sustainable as Spielley's bot ended up with a lot of open orders (especially sell orders during last week dump). Spielley's bot is now running with a spread between 2% and 0.2% depending on its available funds etc. But it's fine. My bot managed to make 100 ETH of volume during the last week (both on Binance and on Coss). It's not millions but it's a good start.
What's new ? Arb bot 2.0:
I've been working all the week on a new version of the bot. This new version is now using the internal API (the one used by Spielley's bot) and that's mean it's faster, more accurate and also... it can now manage multiple pairs, as much as I would like. To add a pair to the bot, nothing more than writing the pair into the code like "LTC/BTC", and there are 46 shared pairs between Binance and COSS (excluding fiat pairs, I'll wait for Fiat withdrawals to be enabled on COSS to start arbitrage on Fiat pairs).
What's next ?
As you probably now, to arbitrage a pair between two exchanges a bot needs a little of both asset of a pair (for example to run the arb bot on ETH/BTC I'm using 10+ ETH and 0.8 BTC), and it needs a lot of funds to be able to keep the order books aligned (or a lot of people arbitraging). I wanted to keep aligned both order books on ETH/BTC as much as I could, this is why I put that amount (I would probably need a bit more when the market moves a lot but that's not the question).
That being said, I had some LTC that I forgot, so I'll add the LTC/BTC pair in the next few minutes (unfortunately the ETH/LTC pair is the only one that can't be added as the pair is reversed and not matching Binance LTC/ETH pair).
And this is where I need you: to open new pairs I would prefer to let the community chose, I won't have funds (nor I want to invest in shitcoins) opening all the 46 pairs. Considering every common crypto has two pairs, there are around 22-24 crypto quoting on both Coss and Binance. So let me know which Crypto you would like to see following Binance prices (better if you plan to use the pair on Coss) , I'm able to fund 2-3 crypto on top of of ETH/BTC and LTC/BTC (this will bring the total to 6-8 pairs running on the bot. I'll buy 1.5 ETH of every crypto + add 0.5 ETH of value in ETH and BTC 50/50 for every new coin.
Even if that won't be enough to be sure that both order books are aligned, it will start creating volume.
When Coss announced Coss 2.0, my first reaction was to make sure that they would continue working on the Coss 1.0 API, I don't want to wait 6 months to see the volume coming along. I was pretty happy at first as they seemed to be releasing it before end of June. But things changed, now Rune stated that first priority is NEO pairs and then they'll move on to the API. That means, for me, that the API won't come probably until end of July or August (at least).
I want to see the API for various reasons, but that will allow us to bring another kind of liquidity bots on Coss, working with other exchanges (I think Spielley might be working toward that and I'll start too as soon as we have orders ID on Coss API, to allow spreads being reduced to less than 0.1%..), more arbitrages bots, more algo trading bots and more community efforts like r/COSSBot.
This is why I need you too, I need to take a decision and I want the community to help me with it: Should I wait for the API to come (that would probably give people the opportunity to easily make arb bots, liquidity bots, etc, or should I start a CELT like effort dedicated to arbitrage on Coss ?
Open mind about a potentiel CELT like community effort:
At first I thought a CELT like token would be a good idea: people send 2 ETH, I buy a crypto with 1.5 ETH and keep the rest in ETH and some in BTC to do the arbitrages. But in the end it's not a good idea:
- An arbitrage bot can't lose money: for every arbitrage the bot makes, it makes money on 99% of the trades, don't make any on 0.9% of the trades and makes a very tiny loss on 0.1% of the arbitrages. The bot is set up to be triggered at 0.09% (0.04% fee on Coss + 0.05 fee on Binance) but every arbitrage has a net performance between 0% and 1%+ (even when you want to make it for free you end making a bit of money).
- More funds = more exchanges ? Actually the bot is running on Coss – Binance, but now that I'm done with the code of this bot, I plan to connect it to at least another exchange (preferably with a nice spread and a very tiny fee percentage or even a free-to-trade one). That would again bring more opportunities to make volume on Coss.
- Even making money, you can lose some: As I explained before, the bot works in a sense like Spielley's one, it has to buy a a certain amount of crypto other than ETH and BTC.
- Others' money: I'm not a big fan of having money that isn't mine. I've been working on the bot with a very close friend of mine, we made a fund together to run the bot but he is a very close friend. Not that I'm not confident (I have 2FA on every account, even on my email, I have a ledger that could be used to create the contract etc.) but I'm sure you can understand me.
Why a CELT like token isn't the way to go to fund an arbitrage bot ?
If someone sends me 2 ETH, I use let's say 1.5ETH to buy an asset. Then I would need to make 1.5 ETH from arbitrages to be sure that the fund won't be losing money (even if the asset goes to 0). And I really don't want to deal with losing money from other people due to the bear market.
Then, what could be the way to go ?
Excluding ETH or BTC fundings. You want to see arbitrage going over your favorite altcoin on Coss ? You send me 3.2 XXX, at any moment I would be able to send you back those 3.2 XXX. The market drops ? You still have your 3.2 XXX. I would need to create a script but then once or twice per month I could make a report, calculate the %value of everyone assets and share the earnings of the month for everyone). I'll add enough ETH and BTC to cover those parts.
Example: after 1 month the 3.2 XXX are worth 4% of the fund, the fund made 2 ETH in a month, you now have 3.2 XXX and 0.08 ETH.
Why would I do that ?
You know I'm PRO COSS, PRO FSA etc. but that's not all. I have enough ETH and BTC to cover all 46 pairs on COSS, but I don't have the "assets" (appart from LTC) and in this bear market I don't want to risk investing in other assets that I don't want to hold (already hard to hold my COSS bags lol). I would have my % shares too as funding the bot with ETH and BTC.
In conclusion, what do you guys think of that ? If you guys think it's a good idea, I will start working on a report model and also on fully automated (could even share to the funders all the trades live using a private slack, I already do that with my friend). I'm 100% dedicated to crypto and bots for few months now, COSS is one of my biggest holds and I think we could make something nice here.
Let me know what you think, don't hesitate to ask anything.
PS: we are still looking for NodeJS devs for r/COSSBot
Edit: Forgot to share all the pairs in common on Coss – Binance: