Because assets cannot be minted on the weekends, there is a short supply of assets for trading. As a result, the prices of assets trade at a premium vs the actual market price. Check out the screenshot. SLV is trading at almost a 12% premium and the lowest asset premium is still 4%.
At least for the time being, buying on Friday, selling on Sunday, and buying back on Monday is a highly profitable strategy, yielding even more than the highest APR’s.
I noticed the same thing. However, I believe the arbitrage system isn’t working properly on weekdays either.
Prices can be brought down through minting and selling. However, you will need to buy back the asset to close your position (which is a shortposition by then). Buying back immediately doesnt make sense (prices would still be the same). So, arbitrage is far from risk free, if the shareprice goes up, you lose. Arbitrage should be more or less riskfree to function effectively.
But what real options are there? Lower fees and ratio do not solve the problem of being forced to buy back the shares (thus raising their price again, making the whole ordeal ineffective).
Couldn’t one just avoid this by swapping for an mAsset on the open market during the week and then selling on the weekend?
For the weekend part, yes, to an extent (the amount you bought before the weekend). Ill personally sell some later today.
But after that it depends on there being enough People to open up a short postition for a longer period.
Arbitrage shouldnt depend on the riskattitudes of arbitreurs.
From what i’ve seen being here from the beginning, the prices pump every weekend, then towards the end of the weekend they normalize , later today we will see a dump, then tomorrow in pre market the prices we be pushed down to where they should be by people opening CDPs