Arbitrage
A trade that exploits a price difference between venues for the same asset, ideally with little to no market risk.
Stablecoin arbitrage is the primary peg-keeping mechanism for fiat-backed coins (mint at par via the issuer, sell on-chain) and CDP coins (open / close vaults to capture peg deviation). Arb capacity is bounded by primary-market windows, capital deployed, and gas / spread costs.
Related terms
- PegA stablecoin's design target price — usually $1 USD, though EURC, agEUR, and XSGD are pegged to other currencies.
- Flash loanAn uncollateralised loan that must be borrowed and repaid in the same transaction — atomic, or it reverts.
- MEV (maximal extractable value)Value an entity ordering transactions in a block can extract from rearranging, inserting, or censoring them.