GHO Arb

Summary

A smart contract that arbitrages GHO using GHO FlashMinter, GHO Stabilitiy Modules and Uniswap V3 pools.

BEWARE: the code in this repository is not intended to be used in production, but to showcase/inspire how to use multiple GHO services in DeFi.

Design

GhoArb

Arbitrage flow:

1. Caller mints an amount of GHO using GHO FlashMint.

• Few arbitrage params are encoded in data (as abi.encode(<enum:GsmAsset>,<uint256:minProfit>,<bytes:path>)):
  • gsmAsset: either USDC or USDT mode.
  • minProfit: the expected profit after the arbitrage.
  • path: the Uniswap V3 swap path (1..N pools).

2. GhoArb trades GHO either for USDC or USDT on Uniswap V3 leveraging Exact Input Multi Hop Swaps.

• Multi-hop swaps allows triangular arbitrage.

3. GhoArb sells either USDC or USDT for GHO on the GHO Stability Modules (GSM USDC or GSM USDT).
4. GhoArb repays the minted GHO (plus fee) to the GHO FlashMint, and keeps the benefits.

• It will revert under the following circumstances:
  • The arbitrage is gonna be executed after the block deadline.
  • If the resulting GHO amount from selling either USDC or USDT to the GSM Stability Module is less than the amount required to repay the GHO FlashMinter.
  • If the abitrage GHO profit is less than the expected one (minProfits).

Other highlights:

• GhoArb is compatible with Chainlink Automation 2.0 via AutomationCompatible. Currently registration has to be done via UI.

What's next

Short-term:

• ADD A PROPER TEST SUITE!.
• Double-check function invariants (this benefits from a good test suite).

To be explored/considered:

• Adding support for other AMMs (Curve DeFi GHO pools!!! Uniswap V3 pools have low liquidity).
• Make it more MEV resistant (e.g. a factory that deploys a GhoArb that arbitrages in the constructor).
• Improve Chainlink Automation integration:
  • Add support for register/unregister the keeper programmatically.
  • Leverage gasless checkUpkeep() function to allow more than one Uniswap V3 swap path and arbitrage params. The logic should pick the most suitable one.
  • Take into account the Automation cost in minProfit.
• Make execution fail fast (and with a comprehensive error message) if the involved GSM module can't sell GHO (expected to revert).
• Unsetting the forwarder when ownership is transferred.
• Add support for other kinds of GHO arbitrage (e.g. using AAVEv3 Pool.supply() and Pool.repay()).

Usage

BEWARE: this repository is built on top of PaulRBerg's foundry-template. See its Usage section for further comprehension.

Install dependencies

First install bun, a Node.js package manager alternative to Foundry git submodules.

Then install package.json dependencies by running:

bun install

Test GhoArb

Run the tests:

$ forge test

Alternatively (currently there is only one test contract):

forge test --match-contract GhoArb_Fork_Mainnet_Test -vv

Deploy GhoArb

Deploy to Anvil:

$ forge script script/DeployEthereumMainnet.s.sol --broadcast --fork-url http://localhost:8545

For this script to work, you need to have a MNEMONIC environment variable set to a valid BIP39 mnemonic.

For instructions on how to deploy to a testnet or mainnet, check out the Solidity Scripting tutorial.