Flash Loan Triangular Arbitrage

• Flashloans are just codes executing loans and trade all in one transaction.
• This code assumes you have already identified an arbitrage opporunity
• It is easier to use Alchemy, Hardhat and EtherJS for development.

Setup

Quick Guide

• run code below to install

npm ci // use this instead of npm install
npx hardhat test

• You will likely see a "Arbitrage not profitable" error come up, if the arbitrage is not profitable. This is the most common result and in fact means the code is working.
• Deploy to mainnet or testnet npx hardhat run scripts/deploy.js --network testnet

Reading Smart Contract Data

• To read pancakseswap data in BSC from contract:
  • Install relevant JS modules like EtherJS with npm init and npm install
  • Setup the provider. The provider can be any BSC JSON RPC. the JsonRpcProvider used in this tutorial is "https://bsc-dataseed.binance.org/"
  • Get relevant contract addresses:
    • addressFactory. Pancake Swap Factory address refers to the address of the facotry smart contracts that creates the token contract and liquidity pool. Refer to this. Tutorial requires it, but the code is effectively unused.
    • addressRouter. Pancake Swap Router address provides the prices. Refer to this
    • addressFrom. Is the address of a token like BUSD
    • addressTo. Is the address of another token like WBNB
  • Get ABI Variables i.e. "function getPair(address tokenA, address tokenB) external view returns (address pair)",
  • In the contract Router, put amount in then get amount out. Parse them to ensure human readible decimals.
  • Then run code node public/pancake/client/GetPrices.js to get results
• Reading data from uniswapv2 is very similar to pancake
• To read uniswapV3 from contract:
  • npm i --save-dev @uniswap/v3-sdk @uniswap/sdk-core
  • Get provider JSON RPC
  • Get quoter address
  • Pull price information with quoteExactInputSingle
• For LiquidityPool details in uniswapV3, refer to public/uniswapV3/client/pool.js and public/uniswapV3/client/factory.js
• getPool basically returns the liquidity pool based on the token addresses and factory addresses.
• For more information:
  • Refer to /public/pancake for code on how to read PancakeSwap v2.
  • Refer to /public/uniswapv2 for code on how to read Uniswap v2.
  • Refer to /public/uniswapv3 for code on how to read Uniswap v3.

Testing with Hardhat

• Hardhat is equivalent to Truffle
• Real value proposition is to allow for interaction with a fork of mainnet for testing
• npx hardhat node --fork https://eth-mainnet.alchemyapi.io/v2/${ALCHEMY_API_KEY} to launch a testnet
• const [ownerSigner] = await ethers.getSigners(); gets a list of testnet accounts.
• npx hardhat test to run hardhat testing
• Refer to /public/hardhatTest for code for testing.
• Refer to utils and test folder and sample-script.js

Flash loans

• Flash swaps with uniswap v2
• Anatomy of a flash loan swap. The code below shows the flash loan swap is similar to conventional swap. The only difference is the bytes calldata data callback at the end.

function swap(uint amount0Out, uint amount1Out, address to, bytes calldata data);

This triggers another callback to another function shown below

function uniswapV2Call(address sender, uint amount0, uint amount1, bytes calldata data);

• For flash loan code, refer to: utilities, libraries, interfaces, hardhat.config.js, FlashTri.sol and /scripts/deploy.js
• Old Resources: public/flashloan/pancakeswap and public/flashloan/uniswapsushi. The code here might not work, but concepts remain the same.

To Do

• Read up on calldata for Solidity. The .swap triggers pancakeCall as it has calldata as explained in UniswapV2 flash loan article

// Passing data as bytes so that the 'swap' function knows it is a flashloan
bytes memory data = abi.encode(_tokenBorrow, _amount, msg.sender);

// Execute the initial swap to get the loan
IUniswapV2Pair(pair).swap(amount0Out, amount1Out, address(this), data);

// code above triggers
function pancakeCall( ... , bytes calldata _data ) external { ... }