Mine Arbitrage

Below is an example of how the process of arbitraging works in relation to a mine token (xMINER) and its underlying asset.

This example will be using the MINER token, along with the MINER index mine (xMINER) that only contains the MINER token.

For this example, we will assume that the price of MINER has been rapidly increasing due to sudden buy pressure and is now worth $100 USD, however, the price of the MINER index mine (xMINER) has not yet adjusted and remains at $95 USD.

As there is a ~5% difference between MINER and the mine token - xMINER, a user could arbitrage the MINER token versus the xMINER token by executing the following steps:

• Buy xMINER via Uniswap

• Redeem the xMINER tokens to MINER for a small fee

• Sell the redeemed MINER on Uniswap to make a profit

Conversely, if the price of xMINER is greater than the price of MINER, a user could:

• Buy MINER via Uniswap.

• Mint MINER into xMINER tokens for a small fee

• Sell xMINER tokens via Uniswap to make a profit

In both scenarios, there are benefits all around:

• The arbitrageur makes a profit.

• xMINER collected as fees from minting or redeeming are burned, which increases the overall value of xMINER to the benefit of xMINER holders.

• Remaining fees are used to market buy MINER tokens to the benefit of all MINER holders.

• 10% of market-bought MINER are burned, contributing again to the benefit of all holders through supply reduction.

• 90% of market-bought MINER are distributed as rewards to the staked liquidity providers of the xMINER index mine.

With more mines being created and more liquidity provided to each mine, these arbitrage opportunities will grow exponentially and will be utilized by users and automated MEV bots, benefiting everyone in the system.