Core Insights - The article discusses the strategic approach taken by a company to exploit arbitrage opportunities between HyperEVM and Hyperliquid, particularly focusing on the HYPE token and its price discrepancies [2][3][4]. Market Conditions - In March 2025, the cryptocurrency market was facing significant challenges, prompting the company to seek new opportunities, particularly with 40% of HYPE tokens yet to be distributed to the community [2]. Arbitrage Strategy - The company identified price discrepancies between HyperEVM and Hyperliquid due to HyperEVM's block time of 2 seconds, leading to potential undervaluation or overvaluation of HYPE [3][5]. - Initial trading strategies involved executing trades on HyperEVM when HYPE was undervalued and hedging on Hyperliquid, resulting in daily trading volumes of $200,000 to $300,000 without losses [6][7]. Competitive Landscape - The company recognized two competitors engaging in similar arbitrage activities but aimed to outmaneuver them by leveraging a staking feature introduced by Hyperliquid, which allowed for a 30% rebate on trading fees [8][9]. Volume and Profit Growth - The company achieved over $500 million in trading volume, significantly outperforming competitors and generating daily profits ranging from $20,000 to $120,000 [9][10]. Operational Challenges - As trading volume increased, the company faced operational bottlenecks due to gas limits on HyperEVM, which restricted the number of arbitrage transactions per block [11][12]. - To address these challenges, the company implemented strategies such as using multiple wallets for independent transaction submissions and dynamic gas control to optimize trading efficiency [13]. Optimization Techniques - The company shifted from being a taker to a maker in trades, allowing for capturing more price fluctuations and reducing transaction fees, which enhanced net profits [16][21]. - New parameters and logic were introduced to manage trading positions effectively, minimizing imbalances and optimizing profit margins [18][21]. Innovations in Trading - The introduction of perpetual contracts for HYPE trading provided additional arbitrage opportunities and generated approximately $600,000 in funding fees, further enhancing profitability [24][26]. Collaboration and Development - The company emphasized a collaborative approach in developing trading algorithms, with distinct roles in coding and strategy configuration, leading to continuous optimization and adaptation to market changes [27][28].