Case by Marsbase: Alameda buys #ETH from Celsius at a premium to the market
Introduction. Adam from OTC Marsbase
Hi all! ADAM from OTC Marsbase is with you today.
Oh, by the way, I am NFT! More about me here.
Today I will tell you an interesting OTC Case. If you are already familiar with OTC Marsbase, then you can get straight to the point.
OTC Marsbase is the first DeFi OTC DESK.
To find out and understand why we created the platform.
- Go to https://otcmarsbase.io/
- Explore Medium, which has a lot of educational materials
- If you are too lazy to read, then there is the Marsbase YouTube channel. I advise you to start with this video — it reveals the essence of the project in a minute.
- And if you have time, then check out the recent AMA session with the Marsbase team
What happened?
In short, the Alameda Research fund (the well-known Curly Sam from FTX) bought 67 thousand ETH for 74 million USDC with a premium.
You can find the full study at this link on the @DeFiyst twitter account.
For us, the key word here is premium. What does premium mean?
This means that Alameda paid a higher price than the market price. Those. the buyer paid extra to the seller when buying a large volume. Why do it?
It would seem that on the contrary, for a large volume, they could buy cheaper, but no.
Here we need to understand very well how the price impact and slippage mechanisms work when buying a large volume of tokens from the market (on CEX or DEX).
By buying a large volume, you buy all the limit orders on CEX, thereby moving the price up. When buying a large volume, you can easily move the price up by 5-10-15%. The same is true for DEX.
Marsbase Calculator
To better illustrate the example above, let's turn to a tool such as the Marsbase Calculator. With it, you can calculate the loss from the transaction. Let's try.
1) Go to https://otcmarsbase.io/
2) Find the section with the tracing paper (three scrolls down)
Enter the necessary transaction parameters - 67000 ETH and click Calculate
Let's go to the second step. Here we see that the loss on CEX will be 18% (!), the loss on DEX will be 6.6%.
On the last screen, the platform shows how much you will save if you make a premium of a certain size. It is important to understand that even if you make a 5% premium, you will still be in a good plus for a million dollars. And you can make a premium and 1-2-3%. This is up to you and depends only on the market and how quickly you want to make a trade.
From all this we can draw the following conclusion.
ETH is the second coin to be capitalized on the crypto market. Its capitalization is ~$133.000.000.000. But even with a trade of ~$70.000.000, your loss will be 6.6% or 4-5 million dollars. Liquidity is not as deep as it might seem at first glance.
Solution: use Marsbase and enter the OTC market
In order to reduce losses, there is an OTC market and, in particular, the Marsbase platform.
Here you can make p2p transactions directly between any number of users. Now you have a lot of questions.
How to use? How to create the first offer? How to make money from arbitrage with a limited budget? How to put a bid (offer) in someone else's offer (deal)? And is it safe?