ArbitrageTarget: WBTC/USDCVenue: Aave v3 & CompoundRisk: Low

Cross-Lending Liquidation Cascade Seeker

Instant liquidation capture routing flashloans to liquidate underwater debt positions before secondary cascade.

Executive Summary · Key Invariants

Lending protocols liquidate borrower collateral at discounted penalty rates when Health Factors drop below 1.0. This strategy pre-computes liquidation thresholds against pending oracle price updates in the mempool, firing atomic flash loans that repay debt and seize discounted collateral for instant swap profit on DEXs.

Mathematical Formulation:

90-Day APY

+31.5%

Verified on-chain

Sharpe Ratio

5.75

Risk-adjusted

Max Drawdown

0.5%

Zero directional risk

Execution Window

< 1ms

Pre-trade validation

Formal Datalog Specification & Correctness Proof

The following first-order declarative rule guarantees non-reverting execution by validating token balance conservation and minimum net profit constraints.

Datalog Rule: defi-liquidation-cascade-seeker

datalog

liquidatable_position(User, Protocol, Bonus) :-
    user_debt(User, Protocol, TotalDebt),
    user_collateral(User, Protocol, TotalCollateral, LT),
    oracle_price(Asset, Price),
    calc_hf(TotalCollateral, TotalDebt, Price, LT, HF),
    HF < 1.0,
    calc_bonus(TotalDebt, Bonus).

Execution Logic & Pipeline Architecture

1. Continuously maintain full-state user debt table in memory. 2. Ingest Chainlink & Pyth oracle tick transactions in mempool. 3. Identify accounts whose HF falls below 1.0 upon upcoming block. 4. Execute flashloan liquidation transaction in block bundle.

Research Disclaimer: All quantitative algorithms, formulas, and Datalog rules provided by AlphaSeeker are published for educational and scientific research under open-source academic standards. Not financial advice (NFA). Execute on live mainnet at your own discretion.