Insights| Easy Arbitrage Profits in Bear Market? NovaChain's Annualized Rate of Return is as High as 3,778%?

According to RatingToken, a big data rating agency, arbitrage bot platforms are very active recently. These platforms claim to have developed "powerful" arbitrage bots that exploit different prices of the same cryptocurrency on different exchanges to achieve stable profits.

Take NovaChain as an example. Its official website showed 10,281 users before the release of this article, but there is a big gap between the data we got from its token contract address: 0x1A231dF765d0F7674F55d20D022BCb38DA794501 showing only 102 holding addresses and 813 transactions. According to the historical yield curves of this project, the average daily income in the past 10 days is about 1%, and based on the daily compound interest of 1%, the annualized rate of return has reached 3,778%. At the same time, we found that the arbitrage mechanism in NovaChain is not transparent. After registration, you can only see the constantly refreshed logs of arbitrage transactions in the background, but find nowhere to verify whether these arbitrage transactions truly occurred. To put it simply, you recharge 1 ETH to your account on such a platform, then get an access to a web page showing that your balance keeps rising 1% every day on a compound basis. You get a promise that you will get 37 ETH back in 1 year, while actually nothing can be used as a guarantee during this period.

RatingToken researchers remind investors that it is important to acquire commonsense knowledge when making investments. Buffett's annualized rate of return is only 20%, and it is necessary to be cautious about those excessive return commitments.