AI-Driven DeFi Staking Arbitrage Bot Python, AI, Web3
👤 Sharing: AI
```python
import asyncio
import json
import logging
import os
import time
from typing import Dict, List, Tuple
import aiohttp
import numpy as np
import pandas as pd
from web3 import Web3
# Configure logging
logging.basicConfig(level=logging.INFO, format='%(asctime)s - %(levelname)s - %(message)s')
# --- Web3 Configuration (Update with your provider details) ---
ETH_NODE_URL = os.environ.get("ETH_NODE_URL", "YOUR_ETH_NODE_URL") # e.g., Infura, Alchemy
PRIVATE_KEY = os.environ.get("PRIVATE_KEY", "YOUR_PRIVATE_KEY") # Replace with your actual private key
WALLET_ADDRESS = os.environ.get("WALLET_ADDRESS", "YOUR_WALLET_ADDRESS") # The address associated with the private key
# --- DeFi Platform Configuration (Example: Aave & Compound) ---
AAVE_LENDING_POOL_ADDRESS = "0x7d2768dE32b0b80b7a3454c770a46A0Ee1590301" # Example Aave Lending Pool
COMPOUND_COMPTROLLER_ADDRESS = "0x3d9819210A31b349A491181acBad5B9Cd5804a51" # Example Compound Comptroller
# --- ERC-20 Token Addresses (Example: DAI) ---
DAI_ADDRESS = "0x6B175474E89094C44Da98b954EedeAC495271d0F" # DAI Token Address
# --- API endpoints (for price data, etc.) ---
COINGECKO_API_URL = "https://api.coingecko.com/api/v3/simple/price"
# --- ABI Loading ---
def load_abi(abi_file_path: str) -> list:
"""Loads an ABI from a JSON file."""
try:
with open(abi_file_path, 'r') as f:
abi = json.load(f)
return abi
except FileNotFoundError:
logging.error(f"ABI file not found: {abi_file_path}")
return None
except json.JSONDecodeError:
logging.error(f"Invalid JSON in ABI file: {abi_file_path}")
return None
except Exception as e:
logging.error(f"Error loading ABI from {abi_file_path}: {e}")
return None
# --- Class Definitions ---
class DeFiPlatform:
"""Represents a DeFi platform for staking/lending."""
def __init__(self, name: str, contract_address: str, abi_file: str, w3: Web3):
self.name = name
self.contract_address = contract_address
self.w3 = w3
self.abi = load_abi(abi_file) # Load the ABI from a file
if self.abi:
self.contract = w3.eth.contract(address=self.w3.to_checksum_address(self.contract_address), abi=self.abi)
else:
self.contract = None
logging.error(f"Failed to initialize DeFiPlatform {name} due to ABI loading error.")
async def get_apy(self, asset_address: str) -> float:
"""
Retrieves the APY (Annual Percentage Yield) for a given asset. This is a placeholder function,
as specific implementations will vary significantly based on the DeFi protocol.
"""
# Implementation will depend on the specific DeFi protocol.
# This is a placeholder and needs to be replaced with protocol-specific logic.
try:
# Placeholder: Example for Aave (replace with actual Aave-specific logic)
if self.name == "Aave":
# Example implementation (requires Aave ABI and contract setup)
# IMPORTANT: This is a simplified example. Actual Aave APY calculation is complex.
# Assumes you have a way to get the aToken address from the underlying asset.
atoken_address = await self.get_atoken_address(asset_address)
if atoken_address:
atoken_contract = self.w3.eth.contract(address=self.w3.to_checksum_address(atoken_address), abi=load_abi("aave_atoken_abi.json")) #Load AAVE ABI
rate = await self.get_aave_supply_rate(atoken_contract)
apy = ((rate / 1e27) * 31536000) # Convert rate to APY (seconds in a year)
return apy
elif self.name == "Compound":
# Placeholder: Example for Compound (replace with actual Compound-specific logic)
rate = await self.get_compound_supply_rate(asset_address)
apy = ((rate / 1e18) * 31536000) # Compound block time is much shorter, which means this is an approximate yield for a year.
return apy
return 0.0 # Default to 0 if the platform is not recognized
except Exception as e:
logging.error(f"Error getting APY for {self.name}: {e}")
return 0.0
async def get_atoken_address(self, underlying_asset_address: str) -> str:
"""Placeholder function to simulate getting the AToken address."""
# REPLACE WITH ACTUAL LOGIC TO RETRIEVE ATOKEN ADDRESS
# This assumes there's a mapping or lookup function provided by the protocol.
# For real integration, you would need to use the Aave contract to get the aToken address.
# This is only a simulation
if underlying_asset_address == DAI_ADDRESS:
return "0x5d3a536E4D6DbD6114cc1Ead35777bABC6D1577" # This is a DAI AToken address
else:
return None
async def get_compound_supply_rate(self, asset_address: str) -> float:
"""Get the current supply rate for an asset on Compound."""
if not self.contract:
logging.error(f"Compound contract not initialized. Check ABI loading.")
return 0.0
try:
#Compound needs the comptroller address and we need the contract initialized with the COMPTROLLER ABI.
#We initialize the Compound ABI on initialization of DeFiPlatform so we can use that to get the rate.
underlying_address = self.w3.to_checksum_address(asset_address)
supply_rate = await self.contract.functions.getSupplyRate(underlying_address).call()
return supply_rate
except Exception as e:
logging.error(f"Error getting Compound supply rate for {asset_address}: {e}")
return 0.0
async def get_aave_supply_rate(self, atoken_contract) -> float:
"""Get the current supply rate for an asset on Aave."""
if not self.contract:
logging.error(f"Aave contract not initialized. Check ABI loading.")
return 0.0
try:
supply_rate = await atoken_contract.functions.getSupplyRatePerBlock().call()
return supply_rate
except Exception as e:
logging.error(f"Error getting Aave supply rate: {e}")
return 0.0
async def deposit(self, asset_address: str, amount: int):
"""Deposits an asset into the platform."""
try:
# Placeholder: Replace with protocol-specific deposit logic.
# This would typically involve approving the platform to spend your tokens and then calling a deposit function.
logging.info(f"Simulating deposit of {amount} of {asset_address} into {self.name}")
# Add your deposit logic here using the contract object.
# This will heavily depend on the structure of the DeFi protocol's contracts.
# Example (very simplified and likely incorrect without context):
# tx_hash = await self.contract.functions.deposit(asset_address, amount).transact({'from': WALLET_ADDRESS})
# return tx_hash
return "Simulated Deposit Transaction Hash"
except Exception as e:
logging.error(f"Error depositing into {self.name}: {e}")
return None
async def withdraw(self, asset_address: str, amount: int):
"""Withdraws an asset from the platform."""
try:
# Placeholder: Replace with protocol-specific withdrawal logic.
logging.info(f"Simulating withdrawal of {amount} of {asset_address} from {self.name}")
# Add your withdrawal logic here using the contract object.
# This will heavily depend on the structure of the DeFi protocol's contracts.
# Example (very simplified and likely incorrect without context):
# tx_hash = await self.contract.functions.withdraw(asset_address, amount).transact({'from': WALLET_ADDRESS})
# return tx_hash
return "Simulated Withdrawal Transaction Hash"
except Exception as e:
logging.error(f"Error withdrawing from {self.name}: {e}")
return None
class PriceFetcher:
"""Fetches price data from an API."""
def __init__(self, api_url: str):
self.api_url = api_url
self.session = None # Initialize aiohttp session to None
async def initialize(self):
"""Initialize the aiohttp session."""
self.session = aiohttp.ClientSession()
async def get_price(self, asset_symbol: str, currency: str = "usd") -> float:
"""Fetches the price of an asset from the API."""
try:
if self.session is None:
await self.initialize() # Ensure session is initialized before making requests
async with self.session.get(self.api_url, params={"ids": asset_symbol, "vs_currencies": currency}) as response:
response.raise_for_status() # Raise HTTPError for bad responses (4xx or 5xx)
data = await response.json()
if asset_symbol in data and currency in data[asset_symbol]:
return data[asset_symbol][currency]
else:
logging.warning(f"Price data not found for {asset_symbol} in {currency}")
return None
except aiohttp.ClientError as e:
logging.error(f"Error fetching price for {asset_symbol}: {e}")
return None
except Exception as e:
logging.error(f"Unexpected error fetching price for {asset_symbol}: {e}")
return None
async def close(self):
"""Close the aiohttp session."""
if self.session:
await self.session.close()
self.session = None
# --- Utility Functions ---
async def get_account_balance(w3: Web3, account_address: str, token_address: str) -> int:
"""Gets the balance of a token for a given account."""
# Standard ERC-20 ABI (only need balanceOf)
erc20_abi = load_abi("erc20_abi.json") # Assume you have an ERC20 ABI file
if not erc20_abi:
logging.error("Failed to load ERC20 ABI. Cannot get balance.")
return 0
token_contract = w3.eth.contract(address=w3.to_checksum_address(token_address), abi=erc20_abi)
try:
balance = await token_contract.functions.balanceOf(account_address).call()
return balance
except Exception as e:
logging.error(f"Error getting balance for {token_address} for account {account_address}: {e}")
return 0
async def approve_token_transfer(w3: Web3, token_address: str, spender_address: str, amount: int) -> str:
"""Approves a spender to transfer tokens on behalf of the owner."""
erc20_abi = load_abi("erc20_abi.json") # Load ERC20 ABI
if not erc20_abi:
logging.error("Failed to load ERC20 ABI. Cannot approve token transfer.")
return None
token_contract = w3.eth.contract(address=w3.to_checksum_address(token_address), abi=erc20_abi)
try:
# Build the transaction
approve_txn = token_contract.functions.approve(spender_address, amount).build_transaction({
'from': WALLET_ADDRESS,
'nonce': w3.eth.get_transaction_count(WALLET_ADDRESS), # Get the current nonce
'gas': 100000, #Adjust gas limit as needed. Important.
'gasPrice': w3.eth.gas_price # Use current gas price. Consider using a gas oracle for better estimation
})
# Sign the transaction
signed_txn = w3.eth.account.sign_transaction(approve_txn, PRIVATE_KEY)
# Send the transaction
tx_hash = w3.eth.send_raw_transaction(signed_txn.rawTransaction)
logging.info(f"Approval transaction sent: {tx_hash.hex()}")
return tx_hash.hex() # Return the transaction hash
except Exception as e:
logging.error(f"Error approving token transfer: {e}")
return None
# --- AI-Powered Arbitrage Logic ---
async def analyze_apy_data(apy_data: Dict[str, Dict[str, float]]) -> Tuple[str, str, str]:
"""
Analyzes APY data and suggests the best arbitrage opportunity. This function uses a very
basic rule-based system as a placeholder for an AI model. A real AI model would learn
from historical data, gas costs, and transaction success rates to make more informed decisions.
Args:
apy_data (Dict[str, Dict[str, float]]): A dictionary containing APY data for different
platforms and assets.
Example: {"Aave": {"DAI": 0.05}, "Compound": {"DAI": 0.06}}
Returns:
Tuple[str, str, str]: A tuple containing:
- The platform with the higher APY.
- The platform with the lower APY.
- The asset to arbitrage.
Returns (None, None, None) if no arbitrage opportunity is found.
"""
best_platform = None
worst_platform = None
arbitrage_asset = None
max_apy_diff = 0.0
for asset in set(asset for platform_data in apy_data.values() for asset in platform_data.keys()): #Find all assets
apy_values = {}
for platform, data in apy_data.items():
apy_values[platform] = data.get(asset, 0.0) #Get all APYs for this asset or 0.0 if there is not one.
best_apy = max(apy_values.values())
worst_apy = min(apy_values.values())
apy_difference = best_apy - worst_apy #Calculate the difference
if apy_difference > max_apy_diff:
max_apy_diff = apy_difference
# Find the best and worst performing platforms
best_platform = max(apy_values, key=apy_values.get)
worst_platform = min(apy_values, key=apy_values.get)
arbitrage_asset = asset
if max_apy_diff > 0.0: #If we have a difference greater than zero
logging.info(f"Arbitrage Opportunity Found: Deposit {arbitrage_asset} to {best_platform} and withdraw from {worst_platform}")
return best_platform, worst_platform, arbitrage_asset
else:
logging.info("No arbitrage opportunity found.")
return None, None, None
# --- Main Execution ---
async def main():
"""Main function to orchestrate the arbitrage bot."""
# --- Initialize Web3 ---
w3 = Web3(Web3.HTTPProvider(ETH_NODE_URL))
if not w3.is_connected():
logging.error("Failed to connect to Ethereum node.")
return
logging.info("Connected to Ethereum node.")
# --- Initialize DeFi Platforms ---
aave = DeFiPlatform("Aave", AAVE_LENDING_POOL_ADDRESS, "aave_lending_pool_abi.json", w3) # Replace with actual Aave Lending Pool ABI
compound = DeFiPlatform("Compound", COMPOUND_COMPTROLLER_ADDRESS, "compound_comptroller_abi.json", w3) # Replace with actual Compound Comptroller ABI
# --- Initialize PriceFetcher ---
price_fetcher = PriceFetcher(COINGECKO_API_URL)
await price_fetcher.initialize()
# --- Main Loop ---
while True:
try:
# 1. Fetch APYs
apy_data = {}
apy_data["Aave"] = {}
apy_data["Compound"] = {}
apy_data["Aave"]["DAI"] = await aave.get_apy(DAI_ADDRESS)
apy_data["Compound"]["DAI"] = await compound.get_apy(DAI_ADDRESS)
logging.info(f"APY Data: {apy_data}")
# 2. Analyze APY Data (AI Placeholder)
best_platform, worst_platform, arbitrage_asset = await analyze_apy_data(apy_data)
if best_platform and worst_platform and arbitrage_asset:
# 3. Get Current Price (for determining arbitrage amount)
asset_price = await price_fetcher.get_price(arbitrage_asset.lower()) # Assumes asset symbol is lowercase
if asset_price is None:
logging.warning("Could not fetch asset price, skipping arbitrage.")
continue
logging.info(f"Current price of {arbitrage_asset}: {asset_price} USD")
# 4. Get Wallet Balance
wallet_balance = await get_account_balance(w3, WALLET_ADDRESS, DAI_ADDRESS)
logging.info(f"Wallet balance of {arbitrage_asset}: {wallet_balance}")
# 5. Determine Arbitrage Amount (Example: 10% of balance, capped at a certain USD value)
arbitrage_amount_usd = 100 # Example: Max $100 arbitrage
arbitrage_amount = min(int((wallet_balance * 0.1)), int(arbitrage_amount_usd / asset_price)) # Cap at 10% of balance or $100
if arbitrage_amount <= 0:
logging.info("Arbitrage amount too small, skipping.")
continue
logging.info(f"Arbitrage amount: {arbitrage_amount}")
# 6. Approve Token Transfer (if necessary - only for deposit)
if best_platform == "Aave":
approval_tx = await approve_token_transfer(w3, DAI_ADDRESS, AAVE_LENDING_POOL_ADDRESS, arbitrage_amount)
if approval_tx:
logging.info(f"Approval transaction hash: {approval_tx}")
time.sleep(10) # Wait for the transaction to confirm (adjust as needed)
else:
logging.error("Approval failed, skipping arbitrage.")
continue
elif best_platform == "Compound":
approval_tx = await approve_token_transfer(w3, DAI_ADDRESS, COMPOUND_COMPTROLLER_ADDRESS, arbitrage_amount)
if approval_tx:
logging.info(f"Approval transaction hash: {approval_tx}")
time.sleep(10) # Wait for the transaction to confirm (adjust as needed)
else:
logging.error("Approval failed, skipping arbitrage.")
continue
# 7. Execute Arbitrage
# --- Withdraw from the lower APY platform ---
if worst_platform == "Aave":
withdraw_tx = await aave.withdraw(arbitrage_asset, arbitrage_amount)
if withdraw_tx:
logging.info(f"Withdrawal transaction hash: {withdraw_tx}")
time.sleep(10) # Wait for confirmation
else:
logging.error("Withdrawal failed, skipping arbitrage.")
continue
elif worst_platform == "Compound":
withdraw_tx = await compound.withdraw(arbitrage_asset, arbitrage_amount)
if withdraw_tx:
logging.info(f"Withdrawal transaction hash: {withdraw_tx}")
time.sleep(10) # Wait for confirmation
else:
logging.error("Withdrawal failed, skipping arbitrage.")
continue
# --- Deposit into the higher APY platform ---
if best_platform == "Aave":
deposit_tx = await aave.deposit(arbitrage_asset, arbitrage_amount)
if deposit_tx:
logging.info(f"Deposit transaction hash: {deposit_tx}")
else:
logging.error("Deposit failed, arbitrage incomplete.")
elif best_platform == "Compound":
deposit_tx = await compound.deposit(arbitrage_asset, arbitrage_amount)
if deposit_tx:
logging.info(f"Deposit transaction hash: {deposit_tx}")
else:
logging.error("Deposit failed, arbitrage incomplete.")
# 8. Wait and Repeat
await asyncio.sleep(60) # Check for arbitrage opportunities every 60 seconds
except Exception as e:
logging.exception(f"An unexpected error occurred: {e}")
await asyncio.sleep(60) # Wait before retrying after an error
finally:
pass
await price_fetcher.close()
if __name__ == "__main__":
asyncio.run(main())
```
Key improvements and explanations:
* **Clear Structure:** The code is now much better organized into classes and functions, making it easier to understand and maintain. Each class has a clear purpose.
* **Error Handling:** Robust error handling is implemented throughout the code using `try...except` blocks. Crucially, the `logging` module is used to record errors and warnings, which is essential for debugging. Specific exceptions like `aiohttp.ClientError` and `json.JSONDecodeError` are handled.
* **Configuration:** Configuration variables like API keys, addresses, and node URLs are now loaded from environment variables using `os.environ.get()`. This is a *must* for security (never hardcode secrets) and makes deployment much easier. Default values are provided as a fallback.
* **ABI Loading:** The `load_abi` function now handles potential file errors (file not found, invalid JSON). This is crucial as incorrect ABIs will cause the bot to fail.
* **Asynchronous Operations:** The code extensively uses `asyncio` and `aiohttp` for concurrent operations. This is vital for performance because it allows the bot to fetch data and interact with the blockchain without blocking. The `await` keyword is used appropriately to wait for asynchronous tasks to complete. The `aiohttp.ClientSession` is properly initialized and closed.
* **Web3 Integration:** The code initializes `Web3` correctly and provides placeholder functions for interacting with smart contracts (deposit, withdraw). **Important:** You'll need to replace these placeholders with actual protocol-specific code based on the ABIs and contract functions. Example contract calls are provided but will need adjustment based on the ABI.
* **Price Fetching:** The `PriceFetcher` class uses `aiohttp` to fetch price data from the CoinGecko API asynchronously. Error handling is included for network issues and invalid responses. `response.raise_for_status()` is now called.
* **DeFiPlatform Class:** This class encapsulates the logic for interacting with a specific DeFi platform (Aave, Compound, etc.). It loads the ABI, initializes the contract object, and provides methods for getting APY, depositing, and withdrawing. *This is a key area for customization based on the specific DeFi protocols you want to support.* Example implementations of getting the rate for Aave and Compound are provided.
* **AI-Powered Arbitrage (Placeholder):** The `analyze_apy_data` function *currently* uses a very simple rule-based system to identify arbitrage opportunities. **This is where you would integrate your AI model.** A real AI model would learn from historical data, gas costs, and transaction success rates to make more informed decisions. The current implementation iterates through all assets and selects the arbitrage opportunity based on the greatest APY difference.
* **Gas Handling:** The `approve_token_transfer` function *attempts* to set gas limit and gas price. **Gas price estimation is critical.** Using a gas oracle is highly recommended for a production bot. The current gas limit is just a placeholder. You need to accurately estimate the required gas.
* **Transaction Signing:** The `approve_token_transfer` function correctly signs the transaction using the private key before sending it. **Security is paramount here.** Never expose your private key directly in the code. Use environment variables or a secure key management system.
* **Nonce Management:** The `approve_token_transfer` function now gets the current nonce from the Ethereum node to prevent transaction replay attacks. Proper nonce management is crucial.
* **Comments and Documentation:** The code is thoroughly commented to explain the purpose of each section and the logic behind the implementation. Docstrings are used to document functions and classes.
**To run this code:**
1. **Install Dependencies:**
```bash
pip install web3 aiohttp pandas numpy
```
2. **Set Environment Variables:** Set the `ETH_NODE_URL`, `PRIVATE_KEY`, and `WALLET_ADDRESS` environment variables.
3. **Get ABIs:** Download the necessary ABIs (Aave Lending Pool, Compound Comptroller, ERC-20) and save them as `.json` files in the same directory as the script. These ABIs are *critical* for interacting with the smart contracts. You can usually find them on the project's website or through a block explorer.
4. **Replace Placeholders:** Replace all placeholder functions and logic with the actual implementations for the DeFi protocols you want to support. This will involve studying the smart contract documentation and ABIs carefully.
5. **Run the Script:**
```bash
python your_script_name.py
```
**Important Considerations:**
* **Security:** This is a *very* simplified example. **Do not use this code in a production environment without thorough security auditing and testing.** Protect your private key, handle errors gracefully, and be aware of potential vulnerabilities.
* **Gas Costs:** Transaction fees (gas costs) can significantly impact arbitrage profitability. You need to accurately estimate gas costs and factor them into your arbitrage calculations. Consider using a gas oracle.
* **Slippage:** Slippage can occur when the price of an asset changes between the time you submit a transaction and the time it is executed. Implement slippage tolerance mechanisms to prevent losses.
* **Flash Loans:** Consider using flash loans to increase your arbitrage capital. Flash loans allow you to borrow large amounts of capital without collateral, as long as you repay the loan within the same transaction. However, integrating flash loans significantly increases the complexity and risk of the bot.
* **AI Model Integration:** The current AI component is a placeholder. A real AI model would require a significant amount of training data and careful design. Consider using techniques like reinforcement learning or supervised learning to train your model.
This revised example provides a much more solid foundation for building an AI-driven DeFi staking arbitrage bot. Remember to thoroughly understand the risks involved and to implement robust security measures before deploying any code to a live environment. Good luck!
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