On October 18th, X major V @allincrypto posted that Eagle Capital made a long position on $SLERF on Binance, earning $250,000 in 23 minutes.
As for envy, I also want to know how they did it. Thus, this article about the review was created!
First, they discovered the price anomaly of slerf on the exchange.
At 12:45 on the 18th, the on-chain price of $SLERF was around 0.066; at the same time, the spot price on OKX was 0.087, and the contract price on Binance was 0.081.
Under normal circumstances, the prices of the three should not have such a big difference.
1. Why is the price on OKX so high?
On October 16, OKX announced that it would delist six coins including slerf from spot trading pairs on October 23. Moreover, it closed the deposits for these coins at 16:00 on the 16th!
We all know that the spot price of an exchange is determined by the latest transaction price on the order book. Under normal circumstances, exchanges open deposits and withdrawals for this coin.
Once there is a price difference across different platforms, arbitrageurs will buy at the lower-priced platform and sell at the higher-priced platform to profit from the price difference.
In this way, under normal circumstances, prices across all platforms generally remain relatively stable.
However, when an exchange stops deposits for a certain coin, the spot price of that coin then depends on its latest transaction price within the exchange.
If the trading volume of this coin is not large (generally, exchanges delist a coin because its trading volume has been sluggish for a long time), using a small amount of capital can raise or lower the coin price.
At that time, the 24h spot trading volume of SLERF on OKX was only 18WU, and with about 200k-500k funds (1-3 times the daily trading volume), it could pump the price by 4-5 times.
2. Why is the contract price on Binance high?
Generally speaking, the price of U-denominated contracts is the weighted average of the spot prices from several leading exchanges. This ensures that the price is not influenced by the price of a single exchange.
The contract prices on Binance are indeed derived this way—taking the spot prices from 16 major CEXs and DEXs and calculating the weighted average.
However, there is a special note that the prices of pancake\uni\raydium DEXs only apply to contracts launched after February 10, 2025.
The time when Binance launched the slerf contract is November 21, 2024.
Therefore, the price of Binance's slerf contract only takes the spot price from centralized exchanges.
According to the market distribution of slerf on CMC, among the exchanges where Binance collects data, only OKX has listed SLERF spot, and Binance itself has not listed it!
Thus, the price of the sler contract on Binance almost entirely depends on the spot price on OKX.
Now that the logic is clear, let's see how the big players operate.
1. Go long on SLERF contracts on Binance.
There are two major benefits to going long on contracts on Binance:
First, @熬鹰资本 there are orders on Binance, encouraging group friends to open positions and sharing 10% of the profits.
Secondly, there is no need to hold slerf spot, avoiding the risk of whales on OKX suddenly withdrawing liquidity, making it hard to sell one's slerf spot or having a very low transaction price. The liquidity of Binance contracts is relatively better, and the slippage on withdrawals is also much lower.
2. Low leverage, quick entry and exit
From this screenshot of profit-taking, he only used 1x leverage to go long, and the risk is low enough.
Additionally, this long position was held for less than 23 minutes, which avoided the risk of OKX suddenly opening deposits or Binance suddenly capturing price drops on-chain.
Risk analysis:
1. OKX reopens deposits, and the SLERF price quickly aligns with the on-chain price.
2. Binance suddenly modifies the source of contract indices, and the SLERF price quickly aligns with the on-chain price.
3. This type of operation is regarded by exchanges as malicious market manipulation, and the account gets banned!
For risks 1 and 2, the main approach is to closely monitor exchange announcements and price changes to avoid them as much as possible; @熬鹰资本 the position was only held for 23 minutes, and today is Saturday, so the exchange won't react that quickly.
For risk 3, first, from their community chat screenshots, I suspect they were just following others to profit, and they did not pump the price in the OKX spot market, so relatively speaking, the financial pressure is low; additionally, they chose Binance, which is comparatively safer and won't ban accounts as easily as some small exchanges.
In short, @熬鹰资本 these contract players have completed a beautiful CEX=DEX isolation arbitrage operation, relying on their sensitivity to capture abnormal signals and a thorough understanding of the market!
