Arbitrage Opportunities in Secondary Markets

Arbitrage is not a new concept. It has long existed in speculative finance. The most classical form of Arbitrage involves investors who simultaneously buy and sell an asset in different markets to profit from the price difference. However, in a broader sense, Arbitrage opportunities in secondary crypto markets could take diverse forms.

Any investor looking to make gains in the crypto market through alternative strategies, different from the typical “buy and hold” strategies, can accomplish their goal by going out of the box and attempting well-calculated risks. Often, they bet on new early-stage projects—sometimes using platforms like Coin Terminal to access pre-sales alongside major investors—hoping for a thunderous exchange listing, significant price appreciation, and, eventually, a satisfyingly gainful exit.

However, success in this scheme of things requires a deep understanding of the project’s future worth, which is a function of the industry’s macro conditions. The leadership team also plays a big role in making a proposition successful on the ground, regardless of how high its potential might appear on paper. The chance of making errors in such pre-sale judgments is high.

Many investors try to minimize their risk by diversifying their portfolios with different sorts of projects. But there is another way to mitigate such risks. That way involves identifying undervalued tokens with performance records already available rather than betting on new projects hoping for exchange listings.

One of the successful strategies in this area has been where existing projects have been convinced to transition into a blockchain. For better comprehension, let us look at a couple of examples below:

The Transition from Merit Circle to Beam

The Merit Circle token $MC decided to migrate to $BEAM. Merit Circle, the world’s largest gaming-focused DAO, announced a migration to $BEAM after the acceptance of both MIP-28 and MIP-29.

MIP-28 was about migrating the MC token to the BEAM token to better align with the current activities and practices within the Merit Circle ecosystem. MIP-29 was about working out the finer details of how this migration could be executed. It proposed converting the MC token into the BEAM token on a 1:100 basis, where each MC token would make a token holder eligible to receive 100 BEAM tokens.

BEAM came with all the functionalities that the MC token had. BEAM could be used to validate and secure the network and fuel a range of on-chain activities and blockchain gaming. It could also be used for governance activations, including voting on proposals.

BEAM is now available on all major exchanges in the world, including Binance, Bybit, Kraken, MEXC, Gate.io, and many more. There are over 70,000 holders of the token now, and the circulating supply is close to 50 billion BEAM tokens.

The Transition from OM to Mantra

Setting a similar precedent, the $OM token became the new Layer-1 coin to secure the Mantra Chain. The transition helped the Mantra community consolidate around a single OM token rather than two. The move also helped stabilize OM allocations on the currently supported chains (Polygon, BSC & Ethereum) and bring them together under the same umbrella. This includes the staked OM on app.mantradao.com and MANTRA Finance.

The performance of the OM token has been phenomenal over the past year. Its price witnessed a tremendous rise from less than US$0.25 to US$7.5. Currently, the market capitalization is more than US$7.3 billion. The token is listed across all major market exchanges, including Binance, Bybit, OKX, Bitget, Gate.io, and more.

Becoming a Chain is Rewarded With Valuation Spike

Any project that transitions its own chain sees several benefits. Not only does this move give the project full control over its security and design, but it also means more support for other applications and expanded use cases. As a result, investors gain early access to a growing network, while developers and users benefit from direct access, verifiable data, and a stable framework.

Another advantage of such a move is that the project can now implement custom features and optimizations, which helps it achieve its objectives. It grants it a certain level of adaptability, which can help it integrate with other evolving technologies, setting the stage for valuable partnerships within the blockchain ecosystem.

Overall, becoming a chain leads to increased trust in the project, greater user traffic, and a spike in valuation. Investors benefit from the project’s growth, while the market gains liquidity, making it a win-win for all.