Vida took advantage of an unusual bug on the Binance exchange, where an unknown user placed a huge order to buy the BROCCOLI714 token, which is rarely known and undervalued.
The drama started around four in the morning, when Vida noticed an order to buy tokens worth $26 million. Since the total market value of all such tokens was only about $40 million, it was clear that this was an anomaly. Vida estimated that it was a hacked account or a serious programming error.
Due to the huge demand, the price of the token has skyrocketed. Vida immediately adjusted the strategy and opened a long position, expecting further price growth in order to sell at a higher value later.
During the price jump, Binance’s security mechanisms were activated, which created an opportunity for arbitrage – taking advantage of the difference in the price of the same token in different markets. The spot price (buying immediately for cash) was significantly higher than the futures price (contracts for future value). Vida quickly bought where it was cheaper and simultaneously sold where it was more expensive, balancing risk with the exchange’s control department.
Around 4:20 am Vida sold all positions and made a profit of $1.5 million. Ten minutes later, the 26 million order disappeared and the token price plummeted. The trader then opened a short position (short), selling the borrowed tokens and later buying them at a lower price, which further increased the profit.
Binance stated that an internal investigation found no evidence of a hacking attack, which leaves open the possibility that someone manipulated the token’s price by mistake or on purpose. The price of BROCCOLI714 soon returned to its pre-incident level.
(Vijesti.ba)
