VUSD Arbitrage Bot

Automated Flashbots arbitrage system exploiting price discrepancies between VUSD and crvUSD on Ethereum mainnet using Uniswap V3 flashloans.

Current Status: Production Ready

Version: 2.0.0 - Mainnet Deployed and Validated

Contract Address: 0x7ea3df7c51815EF99BfEf5d2122C62e9D6308a22

Validation Transaction: 0x6b49307bb3ead03a8732da5f4c43ec300aaafb5cc5f88ec67701ac44246ba1bf

Key Features:

• Secure smart contract with 5-layer protection (callback verification, slippage protection, reentrancy guards, access control, emergency withdrawal)
• Automated monitoring checks every 15 seconds for opportunities
• 1000 USDC flashloan amount per execution
• Flashbots integration for MEV protection
• Encrypted keystore security (no plaintext private keys)
• ~450,000 gas per execution

---

Arbitrage Strategy

RICH Path (when crvUSD > VUSD price):

1. Flashloan 1000 USDC from Uniswap V3
2. Swap USDC → crvUSD (Curve)
3. Swap crvUSD → VUSD (Curve)
4. Redeem VUSD → USDC (VUSD Protocol)
5. Repay flashloan + 0.01% fee
6. Keep profit

CHEAP Path (when crvUSD < VUSD price):

1. Flashloan 1000 USDC from Uniswap V3
2. Mint USDC → VUSD (VUSD Protocol)
3. Swap VUSD → crvUSD (Curve)
4. Swap crvUSD → USDC (Curve)
5. Repay flashloan + 0.01% fee
6. Keep profit

---

Installation

# Clone and install
git clone https://github.com/mitakash/vusd-arbitrage-bot.git
cd vusd-arbitrage-bot
yarn install

# Configure environment
cp env-example.txt .env
# Edit .env with your settings

# Compile contracts
yarn hardhat compile

---

Configuration

Required Environment Variables

# RPC Endpoint (Required)
ETHEREUM_RPC_URL=https://eth-mainnet.g.alchemy.com/v2/YOUR_API_KEY

# Deployed Contract (Required for bot)
VUSD_ARBITRAGE_CONTRACT=0x7ea3df7c51815EF99BfEf5d2122C62e9D6308a22

# Keystore Path (Required - encrypted private key)
KEYSTORE_PATH=/full/path/to/keystore/searcher.json

# Flashbots Auth Key (Required - separate key for bundle signing)
FLASHBOTS_AUTH_KEY=0x...your_flashbots_key...

# All other addresses are pre-configured for mainnet

Keystore Setup

Create encrypted keystore (never use plaintext private keys):

# Create keystore file
yarn ts-node scripts/create-keystore.ts
# Prompts for: private key, password, output path

# Test keystore
yarn ts-node scripts/test-keystore.ts

---

Testing

Important: Oracle Freshness Requirement

⚠️ CRITICAL: Chainlink oracles must have updated within the last 24 hours or tests will fail. For fork testing (Hardhat/Tenderly), always use a block height from within the last 24 hours.

// hardhat.config.ts
hardhat: {
  forking: {
    url: process.env.ETHEREUM_RPC_URL,
    blockNumber: 23633933,  // ⚠️ UPDATE THIS to recent block (within 24h)
  }
}

Local Hardhat Fork Testing

# Test both RICH and CHEAP scenarios
yarn hardhat run scripts/execute-arbitrage-hardhat-test.ts --network hardhat

Tenderly Fork Testing

# 1. Create fresh fork at https://dashboard.tenderly.co (use LATEST block)
# 2. Update TENDERLY_RPC_URL in .env
# 3. Fund wallet
./scripts/fund-tenderly-simple.sh

# 4. Deploy and test
yarn hardhat run scripts/deploy-tenderly.ts --network tenderly
yarn hardhat run scripts/test-deployed-contract.ts --network tenderly

Note: Create fresh Tenderly forks every 2-4 hours to avoid stale oracle data.

---

Production Usage

Running the Live Bot

# Start production bot
yarn ts-node scripts/execute-arbitrage-LIVE.ts

# Bot behavior:
# - Checks for opportunities every 15 seconds
# - Uses 1000 USDC flashloan amount
# - Only executes if profit > $2.00 after all fees
# - Submits via Flashbots for MEV protection

What the Bot Does

1. Every 15 seconds:

   • Queries Curve pools for exchange rates
   • Queries Chainlink oracle for VUSD redemption price
   • Queries VUSD protocol for mint/redeem fees

2. Simulates both paths:

   • Calculates expected outputs for RICH and CHEAP paths
   • Accounts for all fees (flashloan 0.01%, Curve swaps 0.04% each, VUSD fees ~0.036%, gas costs)
   • Determines net profitability

3. If profitable (> $2.00):

   • Calculates slippage protection (5 basis points default)
   • Creates transaction with minimum output requirements
   • Submits Flashbots bundle to relay
   • Monitors for inclusion

4. Logs all activity:

   • Opportunity checks
   • Profit calculations
   • Execution attempts
   • Transaction results

---

Key Scripts Reference

Production Scripts

Script	Purpose
execute-arbitrage-LIVE.ts	Main production bot (15s interval, 1000 USDC flashloan)
deploy-vusd-arbitrage-robust.ts	Deploy contract to mainnet with robust error handling

Testing Scripts

Script	Purpose
execute-arbitrage-hardhat-test.ts	Test on local fork (requires recent block within 24h)
test-deployed-contract.ts	Test deployed contract on Tenderly
execute-arbitrage-mainnet-public-test.ts	Validate on-chain logic with public transaction
execute-arbitrage-mainnet-funded-test.ts	Test via Flashbots (may not be included if not profitable)
test-deployed-mainnet-contract.ts	Sanity check (designed to revert for validation)

Utility Scripts

Script	Purpose
calculate-min-flashbots-priority-fee.ts	Analyze blocks and recommend gas fees
diagnose-arbitrage.ts	Debug profitability calculations
create-keystore.ts	Create encrypted keystore file
test-keystore.ts	Verify keystore functionality
check-balance.ts	Check wallet/contract balance
test-env.ts	Validate environment configuration

---

Smart Contract Architecture

Security Layers

1. Callback Protection:

address private s_activePool;  // Only the initiated pool can callback

function executeRich(...) external onlyOwner {
    s_activePool = poolAddress;  // Set before flashloan
    pool.flash(...);
    s_activePool = address(0);   // Clear after
}

function uniswapV3FlashCallback(...) external {
    if (msg.sender != s_activePool) revert UnauthorizedCallback();
    // Prevents malicious pools from calling callback
}

2. Slippage Protection:

struct RichParams {
    uint256 minCrvUsdOut;  // Minimum from each swap
    uint256 minVusdOut;
    uint256 minUsdcOut;
}

// Off-chain bot calculates these, on-chain contract enforces them

3. Reentrancy Protection: OpenZeppelin ReentrancyGuard on callback

4. Access Control: Owner-only execution functions

5. Emergency Controls: Owner can withdraw stuck funds

Gas Optimization

• Immutable variables for addresses (save SLOAD gas)
• Custom errors instead of revert strings
• Single approval in constructor
• Solidity 0.8.28 with IR optimization
• Result: ~450,000 gas per execution

---

Key Contract Addresses

Deployed Contract:
└── VusdArbitrageBot: 0x7ea3df7c51815EF99BfEf5d2122C62e9D6308a22

Protocol Addresses (all mainnet):
├── USDC: 0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48
├── crvUSD: 0xf939E0A03FB07F59A73314E73794Be0E57ac1b4E
├── VUSD: 0x677ddbd918637E5F2c79e164D402454dE7dA8619
├── VUSD Minter: 0x3C8aeF08d90C2418f8AE887af47ba7d8Db88AF6b
├── VUSD Redeemer: 0x43c704BC0F773B529E871EAAF4E283C2233512F9
├── Curve crvUSD/USDC: 0x4DEcE678ceceb27446b35C672dC7d61F30bAD69E
├── Curve crvUSD/VUSD: 0xB1c189dfDe178FE9F90E72727837cC9289fB944F
└── Uniswap V3 USDC/DAI (0.01%): 0x5777d92f208679DB4b9778590Fa3CAB3aC9e2168

---

Troubleshooting

Common Issues

"Insufficient balance" error:

yarn ts-node scripts/check-balance.ts mainnet
# Ensure you have ETH for gas (at least 0.01 ETH)

"Keystore decryption failed":

# Verify keystore file exists and test with correct password
yarn ts-node scripts/test-keystore.ts

"Bundle not included" (Flashbots): This is normal if the trade is not profitable enough. Flashbots builders only include bundles with sufficient MEV or priority fees to justify the gas usage.

"Oracle price stale" error:

• For Tenderly: Create fresh fork at latest block
• For Hardhat: Update blockNumber in hardhat.config.ts to recent block (within last 24 hours)

Transaction reverts on mainnet:

# Run diagnostics to check profitability calculations
yarn ts-node scripts/diagnose-arbitrage.ts

---

Fee Structure & Performance

Per 1000 USDC Flashloan:

• Flashloan fee: 0.01% = $0.10
• Curve swaps: 0.04% each × 2 = $0.80
• VUSD mint/redeem: ~0.036% each = ~$0.72
• Gas cost: $3-10 (depends on gas price)
• Total costs: ~$4.62-11.62 per execution

Bot only executes if net profit > $2.00 after all fees.

Validation Test Results (Block 23635877):

• Scenario: RICH path with 1000 USDC
• Simulated P/L: -$1.28 USDC
• Actual P/L: -$1.26 USDC
• Simulation accuracy: 98.4%
• Gas used: 447,892 (vs predicted 450,000)
• Status: ✅ SUCCESS

Production Configuration:

• Check interval: 15 seconds (240 checks/hour)
• Flashloan amount: 1000 USDC per execution
• Minimum profit threshold: $2.00 net after all fees
• Expected opportunities: Variable, 2-10 per day typical

---

Security Best Practices

1. Never commit .env file - contains sensitive configuration
2. Use encrypted keystores - never plaintext private keys in code or environment variables
3. Separate Flashbots key - use different key from execution wallet
4. Monitor contract balance - withdraw profits regularly
5. Start with small amounts - use 1000 USDC flashloan initially
6. Review logs regularly - check for unusual activity
7. Use Flashbots in production - prevents front-running and MEV attacks

---

Project Structure

├── contracts/
│   └── VusdArbitrageBot.sol          # Production contract (hardened v2.0)
├── scripts/
│   ├── execute-arbitrage-LIVE.ts     # Main production bot
│   ├── deploy-vusd-arbitrage-robust.ts
│   ├── execute-arbitrage-hardhat-test.ts
│   ├── test-deployed-contract.ts
│   └── ... (other testing/utility scripts)
├── src/utils/
│   ├── keystore-utils.ts             # Secure key management
│   ├── logger.ts                     # Logging utilities
│   └── config.ts                     # Configuration
├── keystore/                         # Encrypted keystores (not committed)
├── typechain-types/                  # Generated contract types
└── logs/                             # Bot execution logs

---

Status: Production Ready - Validated on Mainnet
Last Updated: October 2025
Contract: 0x7ea3df7c51815EF99BfEf5d2122C62e9D6308a22
License:

This project is licensed under the MIT License - see the LICENSE file for details.