What it means
Buying something where it's cheaper and selling it where it's dearer, at the same moment.
Arbitrage traders keep prices in line across exchanges, and help pull a stablecoin back to its peg.
How it works
It's a large part of the trading volume on DEXes.
Related terms
| Term | What it means |
|---|---|
| DEX | Decentralised exchange: smart contracts that let you trade tokens straight from your own wallet, with no company holding your money. |
| Exchange (swap) | Trading one token for another, such as EURC for USDC, at a rate set by the market. |
| Depeg | When a stablecoin's price drifts away from the currency it tracks, for example a digital dollar trading at 0.97 dollars. |
This glossary explains terms in general. It isn't investment, tax or legal advice.