Arbitrage trading solution MOSDEX has announced that it has expanded its exchange coverage to include three extra cryptocurrency exchanges. Making up this list includes ByBit, Bitget, and crypto.com. these three exchanges join an exclusive list of exchanges through which the arbitrage protocol traverses to conduct trades and generate profits. A list that includes top-tier exchanges like BINANCE and Huobi.
The arbitrage protocol leverages API technology to collate information about the orderbook of these exchanges and simultaneously conduct trades using information generated from the orderbook pattern and history. These exchanges are made to operate under the hub created by the arbitrage protocol to conduct trades like a single-point order system.
The profitability of the protocol depends on the liquidity and nature of the orderbook on these exchanges. Despite having a handful of reliable exchanges integrated already, the MOSDEX team has proceeded to add three more popular exchanges. The reason for these additions hasn’t really the properly stated by the team, however, a few reasons could be pointed out.
They include
Improved liquidity
The arbitrage works well when there are unlimited options for buying and selling of arbitraged assets. With the addition of three more exchanges, this will be even easier as these exchanges present more orderbooks to run a trade through. CRYPTO.COM and ByBit are particularly known to have some good volumes, this will come in handy for the protocol.
Increased chances of detecting an arbitrage.
More exchanges, more trading pairs, and more orderbooks are good pieces for a protocol that runs through exchanges looking for loopholes in orderbooks. These added resources avail the protocol more platforms and pairs to scan and therefore increases the chances that it stumbles on a good price gap between pairs on these exchanges or between any of the exchanges. The arbitrage protocol will hope to grow its profitability through this.
Improved trading route
With more platforms under its wings, the MOSDEX arbitrage protocol will hope to develop an improved sketch for the routes it takes for trades. By design, it is expected that it surveys the new exchange, makes changes to its preferred routes and updates its trading directions and habits to reflect the new additions. An improved arbitrage protocol stands more chances of delivering profits for its users.
An overall improvement in the data feeds for the arbitrage protocol.
Everything discussed in previous headings steam from trading decisions developed from more data sources. The added exchanges come with hundreds of trading pairs and a good number of them being multiple pairs for a single asset. This means that the Artificial intelligence system that powers the arbitrage protocol will have even more data to draw information from and fortify its operations to work even better. The positives from this will depend on the complete design of the protocol.
Three more exchanges and still counting. As the need for more exchanges arises, the team is likely to add even more exchanges to the count and scale the functionality of the arbitrage protocol. it is hard to guess the exchange to be added next, the most likely event is that an exchange with enough liquidity gets added to count.
Lower-tier exchanges are also known to have more spread within their orderbooks due to irregular spot and derivatives trade requests. This also has some advantages and disadvantages if they are added to the protocol’s coverage.
The team will probably need to take these into consideration when contemplating the next exchange to integrate.
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