8000 Update README.md · lazycoder1/liquity-arbitrage@cac5ca3 · GitHub
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‎README.md

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@@ -8,11 +8,11 @@ This project will perform an arbitrage of LUSD/ETH pair. This will be done by 2
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The project has two main components , one is the node server and another is the smart contract.
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The node server is responsible to keep a track of the prices of ETH at chainlink and at uniswap. When we notice a price difference where there is a possiblity of a profit from arbitrage it will trigger the smart contract to perform the arbitrage between uniswap and liquity smart contracts.
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The node server is responsible for keeping a track of the prices of ETH at chainlink and at uniswap. When we notice a price difference where there is a possiblity of a profit from arbitrage it will trigger the smart contract to perform the arbitrage between uniswap and liquity smart contracts.
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### How is the amount of eth to be used for the arbitrage calculated ?
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We have three restrictions in place to determine the ETH that can be used for the arbitrage.
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We have three restrictions in determining the ETH that can be used for the arbitrage.
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1) The ETH present in the arbitragers wallet
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2) The redeemable amount at liquity
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3) The uniswap reserves in the LUSD/ETH pair
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```
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Once the minimum is determined we will then check at liquity if we can redeem LUSD the amount of ETH swapped. If not , we will use the redeemableLUSD at liquity to determine the ETH used for swap.
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######Note: The smaller the percent of the uniswap pool we can use the better prices we can get, I have taken 12.5% of the pool for now because the poo reserves are small.
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######Note: The smaller the percent of the uniswap pool we can use the better prices we can get, I have taken 12.5% of the pool for now because the pool reserves are small.
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### How will it determine if there is an arbitrage opportunity ?
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```
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Once the server is started you will need to ping `localhost:3000/subscribe` to start polling for prices. Without subscribing to events , the arbitrage bot will not work.
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You can unsubscribe from the ethereum events by hitting localhost:3000/unsubscribe.
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You can unsubscribe from the ethereum events by hitting `localhost:3000/unsubscribe`.
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#### Sample `.env` file
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```
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Tested by creating a price difference in uniswap and chainlink
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Tx on block: https://kovan.etherscan.io/tx/0xe71c1f51a90a39088073e8b66a9880e1b2c766046c95e3aa3e1814eca7a3b527
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Converted 0.778 ETH to 0.833 ETH
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Converted 0.778 ETH to 0.833 ETH ( 0.778 was choosen based on the wallet balance )
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Tx on block: https://kovan.etherscan.io/tx/0xc544d95f30b02e606f33d08c394b73ed1832d278e813fdde93236f6aaf8fd755
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Converted 1.01 eth to 1.05 eth & 900(wei) LUSD (1.01 eth was choosen based on the uniswap pool reserve )

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