Virtue Docs
  • Overview
    • What is Virtue?
    • How to use Virtue?
  • Key Features
  • Leverage in Virtue
  • Borrowing
    • What is VUSD
    • CDP(Collateralized Debt Position)
    • Fees for Borrowers
  • Mechanisms
    • Stability Pool and Liquidations
  • Recovery Mode
  • Redemption
  • Flash Loans
  • Flash Mint
  • Arbitrage Opportunities
  • Audits
    • Audit
  • Additional Resources
    • Contract Address
  • Brand Assets
  • Glossary
  • Official Links
  • Virtue SDK
  • User guides
    • Position Management
  • Stability Pool Management
Powered by GitBook
On this page

Arbitrage Opportunities

Virtue’s architecture creates several avenues for low-risk arbitrage, particularly using Flash Minted VUSD and cross-chain price spreads.

A. Stability Pool Arbitrage

If the Stability Pool lacks sufficient VUSD during liquidation, users can:

  • Flash Mint VUSD

  • Deposit into the Stability pool to trigger liquidations

  • Receive underpriced collateral

  • Swap it back to VUSD

  • Repay the mint and keep the arbitrage gain

This rewards participants for supporting system health and provides decentralized liquidation coverage.

B. Cross-Chain Arbitrage (Mainnet → IOTA EVM)

Due to price differences across chains, VUSD may trade below $1 on IOTA Mainnet. In this case:

  1. Buy discounted VUSD on a DEX (e.g., 0.97)

  2. Bridge VUSD to IOTA EVM using the native IOTA cross-chain bridge

  3. Swap VUSD → USDC.E via a DEX on IOTA EVM

  4. Profit from the price gap (e.g., 1.00 vs. 0.97)

These opportunities encourage active market participants to enforce the peg and ensure liquidity across environments.

PreviousFlash MintNextAudit

Last updated 26 days ago