Original author: Ada, TechFlow

The crypto market has been rather quiet this year.

The altcoin market is generally bleak, and apart from a few on-chain trading experts, few people can consistently make money.

But in this seemingly quiet market, there is still a group of people quietly making a fortune.

They are even considered "outsiders":

I have no faith in cryptocurrencies, nor do I care about fundamentals or narratives, and I don't speculate on emotions.

Their principle can be summed up in one sentence: only arbitrage, no trading.

The recent article about "Doll Sister" has gone viral. To some extent, she is also an arbitrageur, surviving by exploiting algorithms, emotions, and traffic differences.

She and cryptocurrency arbitrageurs are essentially doing the same thing: finding opportunities in the gaps of the rules and amplifying profits through execution.

In this world where speculation and innovation coexist, arbitrageurs are often more clear-headed than builders.

They saw systemic vulnerabilities, misaligned incentives, delayed rules, and human greed.

In this issue, we interviewed several arbitrageurs of different types.

Their stories may tell us that making money in the cryptocurrency world can be a stable and profitable endeavor.

Arbitrage Master Six: Arbitrage is not a strategy, but a way of thinking.

I'm Lao Liu, and I entered the cryptocurrency world in 2021.

Like many others, I was probably caught in the peak of the DOGE and SHIB wave around mid-2021. A friend of mine who runs a building materials business, after making money by blindly buying in, strongly recommended it to me: "Come on, you can earn 10,000 a day here."

As you can guess, in this "Dog Miracle," he made money, I lost money, and became the bagholder. But that experience made me truly realize for the first time that in the crypto world, market sentiment can quickly and directly translate into wealth.

Then, after the final frenzy of blockchain games at the end of the year, a four-year bear market arrived. It was during this bear market that I had time to observe certain phenomena, such as price differences between exchanges and the exchange rate difference between BTC and ETH.

At that time, I didn't think about making money from it; I simply felt that there were too many misalignments in the market, and the delay between information and price was money. Later, I discovered that the information gap in Web3 could be precisely exploited. That's how I gradually transformed from an observer into an arbitrageur.

My major and job are somewhat related to finance, but I have no background in trading.

Many people, upon hearing the word "arbitrage," assume it requires advanced technology and sophisticated scripts, and is only for financial experts. However, this is not the case. The arbitrage I encountered initially was very primitive—it was manual trading. No scripts, no bots; it relied on eyesight, hands, and internet speed.

Later, I started learning to use tools and scripts with another friend. Even though some quantitative methods were incorporated later, the core was still grassroots trial and error iteration.

So I think one of the profound influences of my grassroots background is that when I look at the cryptocurrency world, I have a kind of third-person perspective. I'm not a believer in new finance, nor do I reject technology. I don't rely entirely on trading; I'm more inclined towards arbitrage logic. Wherever it's simple and has a low barrier to entry, that's where I go. I've always been in this process of learning by doing and mastering through learning.

Conversely, if I had a background in quantitative trading or foreign exchange, I might have learned the Wall Street approach of hedging with options from the start, which would have meant missing out on a lot of the fun of unconventional methods.

My first successful arbitrage was at the end of 2021, when there were frequent price differences between BTC and ETH on Binance and OKX, so I considered whether I should try manual arbitrage.

I bought ETH at 3600 on Binance, and OKEx quoted it at around 3630, theoretically making a profit of $30 per ETH. However, on-chain congestion is a common phenomenon during arbitrage, and most price arbitrage opportunities only last for a few minutes or even tens of seconds. When I actually completed this arbitrage operation and settled the account, I found that after deducting the transaction fees, commissions, and time fluctuations in the process, my actual net profit was far lower than the apparent price difference.

Although I didn't earn much, I experienced the joy of arbitrage for the first time.

Faced with a large number of new projects on the market, I mainly look at two aspects. First, I look at the fundamentals, including the most basic TVL (Total Value Limit) and on-chain activity, as well as the team background, protocol revenue, and community engagement. Second, I look at arbitrage opportunities, assessing whether there are inefficient market opportunities, such as uneven liquidity or loopholes in airdrop mechanisms.

Furthermore, I won't touch a project if it doesn't form a price loop. For example, I'll ask myself three questions: Does this project have verifiable cash flow or profit logic? Is there any obvious asymmetry in its mechanism? Are the incentives excessive? If the answer to all of these is "yes," then it means there might be arbitrage opportunities.

Overall, I prefer DeFi and cross-chain projects because they offer more arbitrage opportunities.

Honestly, arbitrage is really torturous. On the surface, it seems like you're constantly taking advantage of loopholes, but in reality, you're just putting yourself through the wringer.

You have to deal with delays, fluctuations, and loneliness. People without a routine will quickly be consumed by anxiety.

Another important point is to learn how to shut down. Whether you've made a profit or a loss, you absolutely cannot keep holding onto it and stubbornly persisting.

Turn off your computer when you need to, go out for a nice meal when you need to, and play games when you need to. You're more likely to spot opportunities when your body and mind are clear.

I recently bought a new fish tank and started learning how to keep guppies. It's quite therapeutic to do this after work. The key to keeping fish is to first get the water in good condition, and then you don't need to interfere every day; they'll grow on their own. This is very similar to our ultimate goal in arbitrage.

In recent years, I have become increasingly convinced that the entire cryptocurrency industry is actually engaged in arbitrage.

Farming points, taking advantage of airdrops, exploiting subsidies, manipulating rules, and buying low and selling high are all essentially ways of taking advantage of some kind of asymmetry in the system.

Fiscalization is a low-dimensional form of arbitrage, while quantitative trading is a high-dimensional form, but the underlying principle is the same: identify inefficiencies and amplify them through execution.

That's why I often say that arbitrage isn't a strategy, but a way of thinking. It's not just about finding price differences, but about upgrading your mindset.

It keeps you in a constant cycle of observation, verification, and execution. When you can maintain this awareness, you're not just someone who profits from price differences, but someone who can consistently profit from price differences.

Once you adopt an arbitrage mindset, you'll discover that the cryptocurrency world isn't actually a casino; it's more like a mirror, reflecting everyone's understanding of efficiency, desire, and execution.

Brother Qingshui: Be a friend of time

I'm Qingshui Ge, and I've been doing arbitrage for over three years, mainly focusing on IPOs in the primary market.

I first heard about blockchain in 2020. At that time, I was doing cross-border e-commerce, but business was getting worse and worse, and I urgently needed to find a new way out.

Later, I met some people in the cryptocurrency world in a paid community and started learning from them. At that time, I really wanted to succeed, so between 2022 and April 2023, I bought a lot of courses and joined many paid communities, hoping to find opportunities to make money.

Then, I got lucky and inscriptions started appearing on the market in May 2023. I borrowed 10,000 yuan from my credit card and started playing with inscriptions. It was incredibly easy to make money back then. From May 2023 to the end of 2023, my highest unrealized profit was tens of millions of yuan. However, because it was my first time encountering something new, I lacked self-control and didn't take profits in time, so the profits were eventually wiped out. But this experience also gave me a taste of success. The money I earned allowed me to pay off my debts, and I even had some left over. I used the remaining profits to buy Bitcoin.

From then on, I made arbitrage through new cryptocurrency offerings my main job. Every day, besides eating and sleeping, I spent all my time online monitoring the latest project information. Later, I created my own paid community, "Spark," which at its peak had over a thousand members. I updated the group members with the latest project information daily and wrote operational guides, hoping to lead a group of people to achieve good returns in the cryptocurrency market through risk-free arbitrage.

If I were to offer advice to newcomers to arbitrage through initial coin offerings (ICOs), I would say to lock in profits promptly and avoid being overly greedy. From my own experience, I once had a very regrettable experience. I participated in a project called PIPE, with a cost price of only 0.8 USDT. However, this project was incredibly popular, reaching a peak price of 8000 USDT per coin, representing a profit of tens of thousands of times. I was hoping to make a fortune with this, so I held on without selling, only to see it start to fall. Perhaps out of a sense of unwillingness to accept defeat, I thought the price could rebound and break its all-time high, so I became overly greedy. Ultimately, the coin went to zero. This was a very painful lesson for me, and I often use it to remind myself and newcomers to the industry: don't be greedy, be down-to-earth and earn money gradually to become wealthy.

This year, there haven't been any particularly hot IPO projects on the market, so my community has gradually become a more comprehensive one. I share any profitable projects with group members, such as Binance's Alpha and the Spark protocol. Having been in this market for a while, you realize that the main factor affecting people's profitability is their mindset. Many people initially ignored IPO arbitrage, then found it unattainable, then entered the market due to FOMO, and finally got trapped. This mindset is typical of a "newbie" – many dream of getting rich overnight, only to be slapped in the face by reality. Ultimately, it's because they can't reconcile with themselves and go further and further down the wrong path.

Lei Zi: Locking in profits with technology

I'm Lei Zi, and I've been doing arbitrage for four years. Currently, I mainly focus on high-frequency arbitrage between multiple DEXs within the Solana ecosystem.

My entry into the crypto industry was actually somewhat accidental.

In the early days of the DeFi boom in 2021, I was working in sales in the traditional healthcare sector. By chance, a friend mentioned the DeFi craze that was sweeping the industry at the time, so I joined the community and tried trading altcoins and MEME coins. It was during this process that I truly experienced the unique logic of this industry— that "profits can be made quickly by reacting fast and exploiting information gaps" —and realized for the first time that there were opportunities here that were different from those in traditional industries.

The turning point that truly transformed me from a "participant" to a "deep cultivator" was my exposure to DEX arbitrage on the Solana chain in 2024. At that time, MEME coin trading in the Solana ecosystem was experiencing explosive growth, with trading volume soaring. However, there weren't many developers in the market focusing on developing arbitrage bots. I immediately seized this opportunity, gathered a few like-minded friends, and started by developing the first-generation arbitrage product based on the Jupiter protocol. Later, we iterated to develop the second-generation product that supports on-chain computing on OnChain, and now we have the third-generation product that can achieve off-chain actuarial calculations and manual optimization of transaction routing and core algorithms. Step by step, we have upgraded the arbitrage strategy to "refined efficiency optimization".

When I first entered the cryptocurrency world, I also tried trading MEME coin and chasing trending coins with the community. However, I quickly realized that this "profiting from market fluctuations" model was too unstable: sometimes I made money by luck, but the next wave of volatility would wipe it all out, and sometimes the project would even run away with my money, leaving me with nothing. Especially after experiencing the market correction in 2022, I became even clearer that what I wanted was not "one-time windfall profits," but a path that allowed my capital to grow steadily . After all, preserving my principal and accumulating returns is the only way to survive in this industry in the long run.

My core logic for selecting projects currently revolves around "arbitrage opportunities." We primarily rely on scripts we write to monitor the trading volume of tokens on the Solana chain in real time. These scripts focus on tokens experiencing a sudden surge in volume, such as a token's daily trading volume jumping from hundreds of thousands to millions of dollars, or a simultaneous increase in liquidity across multiple DEXs. In such cases, price fluctuations are common, creating arbitrage opportunities. We add these tokens to a watchlist and further calculate price differences and slippage costs across different platforms to determine if it's worthwhile to integrate an arbitrage strategy.

The changes in the arbitrage market over the past few years can be summarized as "the barriers to entry have continued to rise, and the competition has become increasingly sophisticated."

In the early days of the Solana ecosystem, arbitrage, even using simple Python scripts and ordinary servers, could yield decent profits as long as cross-DEX price spreads were captured. However, things are completely different now. Technically, the focus has shifted from "basic price spread capture" to "off-chain actuarial science + dynamic routing optimization." The hardware competition has reached its peak; some people specifically rent physical servers closest to Solana validator nodes and customize network bandwidth optimizations to further reduce transaction latency by a few milliseconds. In terms of personnel, more and more teams with traditional quantitative and fintech backgrounds are entering the market, bringing mature risk control models and technical frameworks, directly raising the competitive barrier in the industry.

Looking back now, I think the most regrettable thing is not a specific loss, but that in the early stages of the arbitrage track, because I failed to break through the core technology in time, I missed several industry opportunities that I could have seized. That feeling of helplessness, "knowing that the opportunity is there, but because the technical ability is not up to par, I can only watch others enter the market and make money," is more frustrating than losing money.

Later, I gradually realized that in the Web3 arbitrage arena, especially in a rapidly iterating ecosystem like Solana, "technology is the core competitiveness." Without solid technical skills, even if you can identify opportunities, you won't be able to seize them. It's precisely because of these regrets that I now place great importance on "continuous technical improvement." I dedicate time every day to learning advanced Rust knowledge, researching the underlying logic of on-chain transactions, and learning strategy optimization from industry leaders. Even if the progress is slower, I don't want to miss the next market opportunity because of "insufficient technical skills." Ultimately, these regrets have made me realize that crypto arbitrage is never about "relying on luck to seize opportunities," but rather "relying on technical skills to seize opportunities." Only by mastering core technologies early and continuously improving my abilities can I gain a foothold in the industry and avoid leaving new regrets due to "insufficient skills."

Qingshan: The arbitrage market is becoming crowded.

I'm Qingshan, and I've been involved in the cryptocurrency world for three years.

I first came across "Web3 Little Voyage" at the end of 2022 through an event on the knowledge-sharing platform "Shengcai Youshu". The overall analysis and description of encryption in the learning materials made me eager to join this industry. I felt that it was full of opportunities and gold mines.

I met many people at that event, and through participating in various activities stemming from these veterans in the cryptocurrency circle, I gradually came into contact with and integrated into this industry.

In the three years since I entered the cryptocurrency world, I've tried various methods, including secondary market trading, simply dollar-cost averaging in Bitcoin, trading cryptocurrencies, and profiting from arbitrage. However, I later discovered that asymmetric returns suited my pace better.

I have no background in finance or trading. Before entering the crypto industry full-time, I worked in software development in a traditional industry. My five years in software development instilled in me a more rigorous approach to projects. After all, all programs are written by people, and I don't have 100% trust in them.

Every year over the past few years, there have been some hot money-making opportunities, and I have been constantly learning and iterating along with the market.

2023 was my most profitable year. Inscriptions were very popular then, and some excellent projects emerged. However, at that time, I mainly relied on operating with a single account and didn't think about leveraging human resources.

In 2024, I participated in a number of Bitget investment projects, mainly FUEL's LaunchX event. Each account had a minimum deposit of $5,000, a two-day deposit period, and a 2% return. While the return rate itself wasn't high, it became quite attractive when it was annualized.

This year, I mainly participated in some large-scale investment projects and Binance's Alpha points program. The Alpha program started at the beginning of the year and has indeed been the project that has brought me the most stable cash flow this year. The returns from a single Alpha project this year have been over six figures.

This year's wealth effect is all around Binance. Paying attention to Binance's events and new projects is generally a good strategy. Looking for projects through Binance's partner events and the "Binance Alpha" list can offer some excellent opportunities. For example, the "zerobasezk" wealth management program on Binance Wallet a few days ago offered an annualized return of around 16%.

However, I feel that the arbitrage sector is becoming increasingly crowded, with fewer and fewer good opportunities and shorter and shorter windows of opportunity. Its long-term sustainability is unlikely; every emerging sector's wealth window follows this pattern. It progresses from a situation where a small number of people make money while most are prejudiced, to most people making money, to attracting a smaller group and increasing the difficulty of making money, to the rise of knowledge-based paid services and training industries (leading to external profit-making), and finally, a return to the mean.

If this sector no longer exists in the future, I will move to another area. I'll go wherever I can make money, like participating in IPOs in Hong Kong.

My earliest side hustle was subscribing to new convertible bonds in the A-share market. Before the new regulations for convertible bonds were introduced, this was a virtually risk-free market.

In short, there will always be places where it's easy to make money, whether it's the cryptocurrency market or convertible bonds, they are all vehicles for this.

From an industry trend perspective, the cryptocurrency market is an industry with a continuous influx of funds. At the beginning of the year, US President Trump issued his own token, and Bitcoin ETFs and Ethereum ETFs were established one after another, all of which indicate that the crypto industry is moving from a niche to a mainstream field of vision. I believe that with the passage of time, it will become an industry that is well-known to the public.

My advice to colleagues or newcomers to the field is:

1. Black swan events are inevitable. Effective risk control is paramount; never go all in.
2. Opportunities abound, but capital is scarce. Cherish every penny of your capital and make it reach its maximum potential.
3. Keep a calm mindset, treat making money as a skill, hone your skills gradually, and making money is just a matter of time.