# 🙋🏿‍♂️ Example: Adam and the Arbitrage

## Arbitrage Traders

tenXXX Tokens will start with three Liquidity Pools. More will be following later.

Because of the pegged price the real price of a tenXXX Token will be \~1:1 to the price of the underlying token. It is the same relation WBTC has with BTC.

![1 BTC = 1 WBTC (orange line) doesn't matter what the price does (blue line)](/files/-MfmVmfWmysXf-nuqs94)

If the price rises in one pool e.g. the BUSD/BTC pool, the ETH/BTC pool also has to follow. This happens with arbitrage. But the WBTC:BTC price stays at 1:1.

![ETH price for WBTC (red line) also pumps when BTC pumps](/files/-MfmWbmdp7S3d8IlkZVH)

**10:00 a.m.:**\
BTC price - $ 40,000 and 15 ETH

**10:30 a. m.:**\
BTC dumps 40% in 30 minutes (we know that days right ;) ).\
BTC pice - $ 24,000 and 9 ETH

\
That means that the tenBTC price has to follow because you get \~1 tenBTC for 1 BTC at the automated market maker. \
It is the hour of Adam. Adam **LOVES** to arbitrage. \
He buys BTC with his BUSD, then tenBTC with his BTC and sells them at the tenBTC/BUSD DEX Pools. That means he bought in at $ 24,000 and sell at $ 40,000 to the pools with the old price. \
\
For an easier calculation: Let's say he does this with 1 BTC. \
He bought for $ 24,000 and sells on $ 40,000\
\=> $ 16,000 profit minus 2x \~1.2% transaction fee \
\=> **total win: $ 15,488**\
On this trade the tenBTC holder earned \~ $ 875.16 (thats meant by win-win(-win) situation).

{% hint style="info" %}
The same thing has to happen to all pools on the DEXs (not only tenBTC:BUSD also tenBTC:ETH, tenBTC:LINK, tenBTC:...)
{% endhint %}


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