Atomic Arbitrage: mercati finanziari decentralizzati e smart contracts per l’eliminazione dello slippage nell’arbitraggio fra cryptovalute

Abstract

The purpose of this master thesis is to prove that, in an arbitrage process, using smart contracts in order to manage cryptocurrencies’ transactions can remove the slippage risk component in the price of those financial instruments. The thesis, as well as describing smart contracts and the Ethereum Platform, illustrates the main features of a proprietary software, privately developed in the last two years, which is able to pull and analyze information provided by decentralized financial markets and automate the investment process. It will cover also the arbitrage algorithm and the programming framework used to develop the software and, furthermore, the business plan and the funding capitals needed by this entrepreneurial project in order to make it works and sustainable for the future. Finally, it will be illustrated a statistical analysis of the software's transactions over the last months in order to understand its profitability and search for the existence of any possible pattern in the features and frequency of the arbitrage opportunities. The final achievement of this project is to allow investors to receive a periodic profit, proportionate to the invested capital, with a low-risk level.