README

Introduction

arby is the reference arbitrage bot for Lyrebird.

arby is able to run at a profit because Lyrebird swaps LRB and USDL based on the target price of USDL (always $1.00), whereas Flamingo maintains the real price of USDL which can deviate from the target price. When these prices differ enough, arby can perform arbitrage by engaging in a swap trade on Flamingo at the real price and rebalancing later on Lyrebird at the target price.

As of May 9, 2022, arby implements arbitrage of USDL between Flamingo and Lyrebird by looping through the following cycle:

• Fetch the current prevailing price of USDL on Flamingo, defined as USDL/FLM * FLM/fUSDT.
• If $USDL > 1.0 + PEG_THRESHOLD, sell USDL for LRB through the FlamingoSwapRouter contract.
• If $USDL < 1.0 / (1.0 + PEG_THRESHOLD), buy USDL using LRB through the FlamingoSwapRouter contract.
• If the wallet's [USDL_VALUE|LRB_VALUE] / (LRB_VALUE + USDL_VALUE) < BALANCE_THRESHOLD * TOTAL_VALUE, rebalance by swapping appropriately on the LyrebirdAviary contract.

Getting Started

• Run npm install to install all dependencies.
• Run export NODE_ENV=test to run on testnet, or export NODE_ENV=prod to run on mainnet.
• Set up your wallet's private key by calling export PRIVATE_KEY=<PRIVATE_KEY> Do not share your private key with anybody. Ensure that your operating environment is secure.
• Tune parameters as desired.
• Run npm run arby-dev to run the bot.
• Remember to start with DRY_RUN=true and check the output.

Deploying to Production

• Run npm run build to transpile the source to JavaScript.
• Run docker build -t lyrebird_arbitrage . to create a container image.
• Run your image.

Tunable Parameters