Arbitrage Opportunities

Arbitrage Opportunities for Principal USDC

Sometimes you might see that the fixed rate APY is negative, this means great arbitrage opportunities! A negative APY means that ppUSDC is trading at a price that is more expensive than USDC. However, since that ppUSDC only allows the holders to redeem USDC at the end of maturity, considering its time value it shouldn’t be priced like this.

One can take this opportunity by minting ppUSDC and pyUSDC in the “Mint” Tab. And then sell the ppUSDC for USDC using Atrix, while still keeping their pyUSDC(which is the interest)!

Arbitrage Opportunities for Yield USDC

Suppose that pyUSDC is traded at 0.01 USDC, assuming a 90 day maturity implies a 1 % * 90 (days) / 365 (days per year) = 24.6% APY. And if you believe that the current variable APY is unlikely to be this high, you can sell your yield token for USDC and gain some profits.