Maximize your Trading Profit on Arbitrum

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Arbitrum is a Layer 2 scaling solution for Ethereum, with a thriving ecosystem of DeFi applications, a growing number of users and thousands of liquidity pools and tokens.

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How to Trade on Arbitrum

To trade on Arbitrum, you'll need a wallet compatible with it, such as Rabby or Metamask , and some tokens in the network. You can move tokens to Arbitrum using a bridge like Across , or by withdrawing them from an exchange like Coinbase .

How to Avoid Slippage and MEV

Slippage occurs when the market price shifts before your transaction is finalized on the blockchain, this change means you might end up with a less favorable price for your trade.

MEV (Maximum Extractable Value) happens when information about your trade is used by advanced traders, known as searchers, to their advantage. A common form of MEV is "backrunning," where your trade is not optimally routed across different liquidity pools, giving these searchers a chance to make a profit from the created arbitrage opportunity.

Although completely avoiding slippage and MEV is challenging, using a fast RPC from a source like ChainList and a DEX (Decentralized Exchange) aggregator such as 1inch can mitigate the issue but won't eliminate it.

Flood solves the problem by having a sophisticated actor called Fulfiller execute the trade for you.

Fulfillers continuously recalculates the best trading routes with each new Arbitrum block and take on all execution risk, effectively nullifying the problems caused by slippage and MEV.

How to avoid gas fees when trading on Arbitrum

To make trades on Arbitrum, you need to perform transactions and cover the transaction fees using ETH. This means you must always have some ETH in your account, even if you're not trading it directly.

During times of high market activity and volatility, when lots of people are trading simultaneously, the fees can soar. This makes executing your trades more expensive. Additionally, when the network is overloaded, the fee estimates provided by your wallet might not be accurate, potentially preventing you from trading at all!

When you trade using Flood , your orders are executed by Fulfillers who charge the gas cost in the token you're purchasing. This approach means you don't need any ETH to start trading. Plus, you generally end up paying less in gas fees, as Fulfillers are optimized for minimum gas consumption.

How to get the best price on Arbitrum

Arbitrum features a vast array of liquidity pools for trading, and picking the best one or deciding how to divide your order can be tricky.

To navigate this, it's wise to use a DEX (Decentralized Exchange) Aggregator like Flood or 1inch.

These tools sift through the liquidity pools for you, smartly directing your order in a way that lessens its impact on the market.

Flood stands out by ensuring your orders are executed at the optimal price, which is mathematically the best price achievable. This means you're getting the most value out of your trades.

Conclusions

Trading on Arbitrum doesn't have to be complex or need special skills. By applying one or more of the strategies we've talked about, you can significantly enhance how you execute trades.

Flood addresses all the challenges mentioned, letting you concentrate on perfectly executed token trades.

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