How to solve liquidity, gas fees, or failed transaction issues in flash loan arbitrage?

Technical Complexity

Flash loan arbitrage bot looks more interesting because it promises high returns without needing huge starting capital, but the technical side is often the first challenge. Running a bot requires smart contract knowledge, coding skills, and experience interacting with blockchain protocols. Even if someone uses an open-source script, small errors in implementation or calculation can lead to failed transactions and wasted fees.

Network Conditions

Gas fees and transaction speed are another challenge. If the bot is slow or gas settings are too low, another trader can execute the same opportunity first. This usually results in paying fees with no profit, which discourages many beginners.

Liquidity Limitations

Flash loans only work if enough funds are available on the lending platform and if the target exchanges have the liquidity to support the trade. Low liquidity often breaks the arbitrage path before it even starts.

Risk Factors

Even with solid code and planning, risks like slippage, sudden market moves, or miner extractable value (MEV) can ruin transactions. These factors are often outside a trader’s control.

How to Overcome Them

The best way to handle these barriers is to start small. Test bots on testnets, study real transaction data, and practice risk management. It takes patience and learning, but the issues can be managed over time.

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