Where are all the risk-free arbitrage opportunities hidden? #Gate广场四月发帖挑战

Everyone wants to earn returns without taking risks—does such a thing exist? Yes, risk and reward are not always proportional, or rather, the risks proportional to the reward are only apparent to the general public. If your understanding of this matter, or the information you possess, differs from that of the average person, then you might have an edge and achieve excess returns.

For example, suppose there is an opportunity to earn 10 million dollars. How much would everyone be willing to pay to buy it? Maybe 1 million, or perhaps 500k. If you buy it at that price, you make a profit. Why is the price so low? Because people don’t believe that the 10 million is a guaranteed profit; in their eyes, the chance of success might only be 10%. But since you understand this opportunity, you see the success rate as 100%, so you can buy it for 500k. Isn’t this a risk-free profit? Yes, but if your understanding aligns with that of the average person and you also see the risk as high, then this arbitrage opportunity doesn’t exist; or if the situation is so straightforward that everyone recognizes it as genuine gold, the purchase price would be driven up to 9.99 million, and there would be no arbitrage opportunity.

Whether risk-free arbitrage is possible depends on your mind—other barriers can be broken down. For example, in blockchain, there are many so-called scientists. Many believe they can rely on technical skills to perform programmed arbitrage when price differences occur. But as soon as more than two scientists spot the same arbitrage opportunity, they will push the profit from 10 million down to 9.99 million. Do you see the logic? It’s unreasonable to think that you alone see the arbitrage opportunity while only one scientist is exploiting it in the market. If that were the case, there would be no profit—high profits depend on what? Your brain. For instance, if you have a better algorithm, you can outsmart others every time before they develop their own. But this isn’t a secret; others will quickly figure out your method. At that point, you need to immediately develop the next better strategy or move to a different pond with more fish—meaning your mind must always be one step ahead, not just your technical development skills.

So whether it’s investing or other ways of making money, you must compete in your area of advantage. Because only there do you have the “brainpower to surpass others.” All the risk-free arbitrage opportunities you see are necessarily hidden within your own area of strength. Making money is a game between people. In a system with low fee extraction, as long as you understand better than others, your pricing of risk and profit will differ from theirs. That’s how you can find opportunities where something worth 10 million is being sold for 500k—don’t just think about Myanmar A; there are people in Myanmar A who can consistently make money.

Does that mean you shouldn’t invest or act if you don’t understand? Yes. But you need to distinguish one thing: how big is your advantage in your area of strength, and how strong is its profit effect? If you’re better at repairing bicycles than others, or better at recognizing genuine gold, the results of these “advantages” will be different. Because each field, each matter, inherently carries a different genetic profit potential.

If you encounter a new field that you don’t understand but has a very strong profit effect, then you should learn about it rather than just ignoring or avoiding it. The simple truth is, in some areas, just knowing a little more than others can earn you huge profits. If your current advantage doesn’t have enough profit potential, you should switch fields instead of continuing to “not understand and not touch.”

So the answer is simple: choose fields with wealth effect spillovers, accumulate relative advantages, and only look for arbitrage opportunities within those relative advantages. This might be the fastest way for young people to accumulate their first bucket of gold.