Jan 2022 Call: White Whale Arb Vaults Launching Soon


According to founder & builder Sebastian Jer, White Whale is close to launching their arb vaults.

TLDR of the Call (hosted by Sebastian):

  • The results of the code audits are very encouraging so far. One auditor said it’s the best code they’ve seen in months.
  • Gov staking now live on Apeboard & White Whale now integrated with XDEFI wallet.
  • Bots are running but need more work to compete with “the big dogs.”
  • Arbitrage on Terra very competitive right now; one large player currently reaping about 30% of the arb profits.
  • White Whale will implement a “hiding strategy” on their frontend where users will be able to make big trades via White Whale

That last point was the biggest takeaway for us. Sebastian described the hiding strategy like this:

Say you want to trade six figures of UST for LUNA or vice verse….by doing it on our frontend, White Whale controls the arb so nobody can front-run White Whale. We have the exposure and capacity to get the word out – if you are making a big trade, do it on our frontend. Not only can we guarantee the lowest slippage, but we also give you back a percentage of the arb profits.” 

@SebastianJer7, founder of White Whale

Freaking awesome and let’s go, White Whale.

You can read our full notes from the community call hosted in Twitter spaces below and/or listen to the recording here on TerraSpaces.org.

For more information about Terra Money, read our full profile here.

BlockMaxi Notes:
Jan28, 2022 White Whale Community Call

Disclaimer: we do not own the following content. We are reporting on it. Quotes are not guaranteed to be 100%, exactly word-for-word.

General Updates

  • Both auditors providing very positive feedback re: the code, one said that it’s the best code they’ve reviewed in months and another said that they are actually anxious because they can’t find many issues. 
  • The point of the audits is this: White Whale is very close to opening the vaults.
  • If there was an emergency where $UST was losing peg on the DEXes, the vault could be live in only a few hrs. 

Comments on UST peg FUD this week (MIM/Wonderland/Degenbox)

  • Most people are just spreading FUD
  • However, Sebastian said, “Personally, I’m not a fan of the Degenbox…at best, it’s a vampire on Anchor yield reserve. At worst, it’s a systemic risk…but it is what it is….[I think] it’s foolish to underestimate the power of panic…we want to be prepared for everything. And we just want to be ready and prepared. We are keeping an eye on that.”

Other Updates

  • Staking now live on Apeboard
  • Now integrated with xDEFI, you can connect with XDEFI wallet
  • Discord leveling services are activated, levels are planketon, minnow, tuna, dolphin, narwhal, shark, killer whale, grey whale, and white whale. No financial benefit, just rewards loyal Discord members
  • Couple bugs on website fixed (backwards price graph, blank screen for some)

Oak Security Audit Updates

  • Oak Security Audit: One of the audits finished this past Tuesday, really only provided minor fixes. White Whale has three weeks to address any issues raised in report and then they will publish results publicly after that. 
  • Only two issues Oak Security audit firm considered significant: (1) White Whale is reliant upon Anchor Protocol (fair enough, this is by design though), and (2) one contract was written in a way where admins could redirect flash loan money, so White Whale is restructuring the contract. Very solvable.

Certik Audit Updates

  • Certik Audit: they’ve delayed a few times. Latest update is that the report should be available on Monday. They said the code is very good, cleanest they’ve seen in months. Bring in one engineer to do a final walkthrough. 
  • Depending on what’s in that report, they’ll shoot for deploying soon.

Bot Updates & Strategy

  • “We’ve seen a flurry of activity this past week — our bots have been as active and profitable as ever.”
  • White Whale basically has both defensive and offensive bots. There are L1 defensive bots protecting peg on Terraswap & Astroport (“That’s the core. We want to ultimately protect the peg everywhere…but that’s the core.”)
  • White Whale is setting parameters with these defensive bots to mainly play defense. They are NOT doing trades all the time, they are waiting for emergencies.
  • On the offensive side, White Whale has more aggressive bots on the DEXes that are built to compete with the other arbitrageurs out there. 
  • Defensive bots = up and running. Offensive bots = also up & running but not super competitive right now.

Current state of arbitrage on Terra

  • VERY competitive and unfortunately centralized right now. Just a few players are dominating arb right now in Terra. 
  • Right now, one arbitrageur is reaping about 30% of all the arb. 
  • A few other wallets are getting some gains…the rest are basically treading water.
  • “These are not individuals in their basement — you can’t do that. The people who are arbing are institutions, well-capitalized, and spending lots of money network infrastructure.” 
  • One arbitrageur is very sophisticated well over 12 instances of their high-powered bot all around the world to execute trades. 
  • Bottom line: “It’s pretty fierce competition.” 
  • Benefit of the last week or so is that White Whale has observed what these professional are doing and now knows what they need to do to ge there.
  • “White Whale will build its own infrastructure & architecture….instances of bots, connections, validators, all these things. We are building, have a map, and plan. But it takes time.” 
  • “On offensive bots, we are still getting front-run most of the time because our infrastructure just isn’t there yet.” 
  • Transactions are currently right behind big-dogs. 

On V2 Bots & Yield

  • White Whale is building v2 bot in Go rather than Python; which should be faster. 
  • Expecting bots to be where they want them to be around March/April. 
  • Full disclosure: one bot using team funds this week was generating 67% this week because of the spike in volatility. 
  • In stable market, yield should be close to ANC — a little higher. 
  • But that yield will increase as more bots are added & strategies are improved. 

White Whale’s Hiding Game Strategy

  • Derived from KeeperDAO on ethereum
  • This is gives White Whale a competitive advantage over rest of arb competition — on frontend of White Whale, you will be able to swap large amounts of UST. 
  • “Say you want to trade six figures of UST for LUNA or vice verse….by doing it on our frontend, White Whale controls the arb so nobody can front-run White Whale.” 
  • “We have the exposure and capacity to get the word out – if you are making a big trade, do it on our frontend. Not only can we guarantee the lowest slippage, but we also give you back a percentage of the arb profits.” 
  • “For example, if you were gonna do a $250K trade from LUNA to UST and you were gonna get $1000 or $1500 back…would you do it on our site rather than Terraswap or Astroport?” 
  • “This will allow us to circumvent the competition — the other arbers won’t build something like that.” 
  • So, White Whale will have the publicity and notoriety to get the word out about this — come trade on White Whale and get some of the resulting arb put back in your pocket along with the lowest trading frees. 

On Launch Date

  • “I want to see us launch before the next community call — February 11th.” 
  • This will depend on specifics in Certik report. 
  • “But it’s coming in and coming in hot.” 

Q & A

  • Is it possible to see White Whale have a DEX one day? “I don’t know if we want to go that route…this is more just a page on our frontend” and will work more like how the current swap functionality works. More of just a feature.
  • Any data on NFTs? “Right now, we just want to get vaults launched. That’s been the focus….they’ll happen when they are appropriate.” 
  • How large are the trade sizes? “Vast majority are $50,000 and below…that’s just where things are on Terra right now. So, once you have more than $1 million in the vault, everything beyond that becomes a barrier [to yield]. Really just there in an emergency….I’m sure market will find a balance for what’s the right amount of money in there.” 
  • Are you concerned about scaling opportunities in the future? “I’m not concerned because there is literally a blue ocean of opportunity out there…once we’ve secured the peg, we have [new projects launching, hiding strategy, and flash loans coming]. There will be multiple revenue streams in UST vault.”

You can follow White Whale (@WhiteWhaleTerra) and Sebastian Jer (@SebastianJer7) directly on Twitter.

Simplifying Crypto for Retail Investors

1000+ Hours of Research. Crypto Profile Deep Dives. Market Updates. Alpha. Subscribe to our weekly newsletter below.