A skilled coder has just made $5 million worth of dai by flashloaning 80,000 eth, currently worth about $37 million.
The return itself is substantial, more than 10%, but here no upfront capital was put forward as the sum was insta borrowed from the liquidity pool available on Aave.
All that was needed was the acute eye to spot the arbitrage opportunity, the speed to code up the smart contract flashloan, and then the dollars to cover the network fees with the coder himself taking no risk as the code either executes all in one with the ability to instantly return the borrowed money and fees, or it doesn’t.
In this case the coder appears to have spotted an arbitrage opportunity through stablecoins on Curve and a new thing called ValueMultiVaultBank.
That seems to have mvUSD, presumably a dapp specific dollar stablecoin, with the coder depositing there, then exchanging on Curve, to withdraw from ValueMultiVaultBank.
The operation itself appears to be complex with a $57 fee paid, but that’s minuscule to the award of $5 million here with this coder now clearly rich.
What is impressive is that anyone could have made themselves $5 million rich without needing any money at all, save for this $57, provided they were able to Solidity flashloans.
Alternatively, one can provide liquidity to these pools and sit back in the hope some coder is happy to pay the borrowing fee because the arb will more than cover it.