A sophisticated TypeScript-based deal orchestration tool that executes freeze-resistant arbitrage loops designed to preserve capital even when individual legs fail. Built for ChainID 138 (SMOM-DBIS-138) with ETH/WETH, USDT/cUSDT, and discounted USDTz.

Deployment: This module runs in Proxmox VE as part of the DBIS Core Banking System (API containers VMID 10150-10199). See PROXMOX_DEPLOYMENT.md for deployment details.

🎯 Quick Start

# Install dependencies (from parent workspace)
pnpm install

# Execute a deal via CLI
node cli.js execute \
  --totalEthValue 10000000 \
  --participantBankId BANK001 \
  --moduleId MODULE001

📖 Documentation

For comprehensive documentation, see README_SUBMODULE.md which includes:

Complete architecture overview
Detailed step-by-step loop explanation
Risk control mechanisms
Failure scenario handling
API reference
Configuration guide

🏗️ Architecture

arbitrage/
├── types.ts                      # Type definitions
├── config.ts                     # ChainID 138 configuration
├── risk-control.service.ts       # Risk validation & enforcement
├── step-execution.service.ts     # Step implementations (0-4)
├── redemption-test.service.ts    # Progressive redemption testing
├── deal-orchestrator.service.ts  # Main orchestrator
├── cli.ts                        # CLI interface
└── index.ts                      # Exports

🔒 Design Principles

One-Way Risk Only: Redemption is upside, not critical for principal recovery
Anchor Asset Untouchable: ETH/WETH (50%) never touched in risky operations
No Leverage on Discounted Assets: USDTz never borrowed against
Independent Leg Settlement: Each leg can settle independently

🔄 The Arbitrage Loop

STEP 0: Capital Split

50% Core ETH (untouchable)
30% Working Liquidity
20% Opportunistic USDTz

STEP 1: Generate Working Liquidity

Wrap ETH → WETH
Supply as collateral
Borrow USDT at ≤30% LTV

STEP 2: Execute Discount Arbitrage

Buy USDTz at 40% discount
Never pledge or bridge without testing

STEP 3: Partial Monetization

35% attempt redemption
65% hold cold
Progressive testing: $50k → $250k → $1M+

STEP 4: Close the Loop

Repay borrow
Unlock ETH
Capture profit

⚠️ Risk Controls

Max LTV: 30% (hard cap)
Max USDTz Exposure: <25% of total NAV
No Rehypothecation: USDTz never used as collateral
Progressive Testing: Redemption tested incrementally

💻 Usage

CLI

node cli.js execute \
  --totalEthValue 10000000 \
  --participantBankId BANK001 \
  --moduleId MODULE001 \
  --usdtzDiscount 0.40 \
  --maxLtv 0.30

Programmatic

import { dealOrchestratorService } from '@/core/defi/arbitrage';

const result = await dealOrchestratorService.executeDeal({
  totalEthValue: '10000000',
  participantBankId: 'BANK001',
  moduleId: 'MODULE001',
});

console.log('Status:', result.status);
console.log('Profit:', result.finalProfit?.toString());

🛡️ Failure Scenarios

The system gracefully handles:

USDTz Redemption Freezes: ETH safe, loan healthy, USDTz held as upside
USDT Borrow Market Freezes: Low LTV allows waiting, no forced unwind
ChainID 138 Congestion: No cross-chain dependencies, can wait

📋 Requirements

Node.js 16+
TypeScript 5.0+
Prisma ORM
Winston Logger
Decimal.js

🔗 Token Addresses (ChainID 138)

WETH: 0xC02aaA39b223FE8D0A0e5C4F27eAD9083C756Cc2
WETH10: 0xf4BB2e28688e89fCcE3c0580D37d36A7672E8A9f
cUSDT: 0x93E66202A11B1772E55407B32B44e5Cd8eda7f22
cUSDC: 0xf22258f57794CC8E06237084b353Ab30fFfa640b

📝 Notes

This loop cannot blow up unless ETH collapses or LTV discipline is violated
USDTz is treated as a deeply discounted call option, not money
Everything else becomes a timing issue, not a solvency issue

📚 See Also

Version: 1.0.0
Created: January 27, 2026
License: UNLICENSED