From Getting Into STRC to Making a Profit: Arbitrage as a Way Out, Part Two
After arbitraging the depegs of apxUSD and apyUSD, I could finally see a way to get out of my position. The key insight was this: as long as a coefficient relationship exists, any price discrepancy presents an opportunity to make a profit, even if the window is often very short. To speed up the convergence, I also posted about this logic on X, and the influence of my account helped me to some extent. You can imagine how desperate I was at the time, even though the strategy itself worked.
Let’s look at the formula again: apyUSD ≈ apxUSD × x ≈ STRC × 0.01 × x. This shows that apxUSD also has a coefficient relationship with STRC, further confirming that all three are pegged to STRC:
apxUSD ≈ STRC × 0.01
apyUSD ≈ STRC × 0.01 × x
sUSDat ≈ STRC × 0.01 × y
So when apxUSD, apyUSD, or sUSDat falls below its implied coefficient value, you can buy these three tokens on-chain and short STRC on an exchange to arbitrage the price difference. This is consistent with the model I wrote about earlier: “A = B, B = C, therefore A = C.”
As it happened, throughout June, holders of STRC-related tokens were all on edge. Countless people cut their losses and ran, and each sell-off created a price discrepancy. You could see it both in the group chats and on-chain: some people exited outright, while others looked for opportunities based on the coefficient relationships.
The problem was that very few exchanges supported STRC contracts at the time. The first one I knew of was Lighter, but its market depth was extremely poor—only around 10,000—so this strategy offered very limited profits in the first half of June. Those with access to U.S. stock brokerages could trade directly through their brokers.
Since the logic holds, opportunities like this are still around as of the day I’m writing this—for example, apyUSD last night. The image shows apxUSD’s price movement. It should maintain a 100:1 ratio with STRC, but it often deviates by 2–4%. However, on-chain fees for apxUSD and apyUSD are too high, so there’s basically no profit unless the price difference exceeds 0.5%. sUSDat, meanwhile, is too stable and rarely offers an opportunity.
There’s another, more important constraint for me: I’ve already used up my high-risk capital, so in theory I shouldn’t allocate any new funds to shorting STRC contracts. I only have sUSDat and apyUSD on hand. What else can I do to move things around? I’ll share a new arbitrage strategy in the next post.
The above is for informational purposes only and does not constitute investment advice.
BitHappy, always evolving
After arbitraging the depegs of apxUSD and apyUSD, I could finally see a way to get out of my position. The key insight was this: as long as a coefficient relationship exists, any price discrepancy presents an opportunity to make a profit, even if the window is often very short. To speed up the convergence, I also posted about this logic on X, and the influence of my account helped me to some extent. You can imagine how desperate I was at the time, even though the strategy itself worked.
Let’s look at the formula again: apyUSD ≈ apxUSD × x ≈ STRC × 0.01 × x. This shows that apxUSD also has a coefficient relationship with STRC, further confirming that all three are pegged to STRC:
apxUSD ≈ STRC × 0.01
apyUSD ≈ STRC × 0.01 × x
sUSDat ≈ STRC × 0.01 × y
So when apxUSD, apyUSD, or sUSDat falls below its implied coefficient value, you can buy these three tokens on-chain and short STRC on an exchange to arbitrage the price difference. This is consistent with the model I wrote about earlier: “A = B, B = C, therefore A = C.”
As it happened, throughout June, holders of STRC-related tokens were all on edge. Countless people cut their losses and ran, and each sell-off created a price discrepancy. You could see it both in the group chats and on-chain: some people exited outright, while others looked for opportunities based on the coefficient relationships.
The problem was that very few exchanges supported STRC contracts at the time. The first one I knew of was Lighter, but its market depth was extremely poor—only around 10,000—so this strategy offered very limited profits in the first half of June. Those with access to U.S. stock brokerages could trade directly through their brokers.
Since the logic holds, opportunities like this are still around as of the day I’m writing this—for example, apyUSD last night. The image shows apxUSD’s price movement. It should maintain a 100:1 ratio with STRC, but it often deviates by 2–4%. However, on-chain fees for apxUSD and apyUSD are too high, so there’s basically no profit unless the price difference exceeds 0.5%. sUSDat, meanwhile, is too stable and rarely offers an opportunity.
There’s another, more important constraint for me: I’ve already used up my high-risk capital, so in theory I shouldn’t allocate any new funds to shorting STRC contracts. I only have sUSDat and apyUSD on hand. What else can I do to move things around? I’ll share a new arbitrage strategy in the next post.
The above is for informational purposes only and does not constitute investment advice.
BitHappy, always evolving