The story of EOS arbitrage: profiting from the price gap between primary and secondary markets during a 350-day ICO, reminiscing about those low-hanging fruits of the past
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The story of EOS arbitrage: profiting from the price gap between primary and secondary markets during a 350-day ICO, reminiscing about those low-hanging fruits of the past
"That was the easiest money I ever made."
Navigating Web3 tides with focused insightsAuthor: Huang Shiliang
EOS changed its name to A, as in the letter A from abcd, so now on exchanges EOS will rank first alphabetically.
I've always had a soft spot for EOS because during the first three months of its 350-day ultra-long ICO fundraising period, I participated in arbitrage between the primary market of the EOS ICO and the secondary market on exchanges, making a small profit.
That was the easiest money I ever earned.
The EOS ICO started on June 26, 2017, and ended on June 1, 2018. It raised over $4 billion worth of ETH, issuing 900 million EOS tokens—an incredibly impressive fundraising feat, unprecedented and certainly never to be repeated.
The EOS ICO mechanism was quite novel at the time.
Initially, EOS conducted its ICO through a smart contract deployed on Ethereum, issuing tokens in two phases: the first phase allocated 200 million EOS tokens all at once during the first five days (June 26–30, 2017);
Then came the second phase—a daily issuance cycle. Every day (approximately every 23 hours), the EOS smart contract accepted ETH deposits from users and, after each round concluded, distributed that day's 2 million EOS proportionally based on each participant’s share of the total ETH contributed.
This daily issuance lasted 350 days, totaling 700 million EOS issued. Combined with the initial 200 million, this made 900 million EOS, plus another 100 million reserved for Block.one, bringing the total supply to 1 billion.
The EOS ICO sold 900 million EOS-ERC20 tokens, receiving $4.2 billion—about 7.2 million ETH.
Back then, very few people in the industry understood how to operate Ethereum contracts, how to deposit funds into a contract, or how to claim purchased tokens.
Tools were extremely primitive compared to today’s well-designed contract interfaces and wallets.
In 2017, the main Ethereum wallet was MyEtherWallet. I have fond memories of it. You used a private key file in JSON format, and to interact with the EOS ICO contract, you had to manually configure various parameters—only slightly better than command-line (DOS) operations.
Today's wallets like MetaMask and imToken are seamlessly integrated with various contracts, fully visualizing all operations through intuitive UIs. Users need only click buttons to complete any contract interaction.
Back then, using MyEtherWallet to participate in the EOS ICO required importing your private key JSON file, selecting the contract, choosing contract functions and parameters, entering the amount of ETH you wanted to send, and even setting gas prices manually.
Then, when claiming (claim EOS-ERC20), you had to fill in several more parameters.
Very few people did these steps back then.
I started out of curiosity—I was genuinely curious about EOS, partly because earlier (around 2015) I had experimented with BitShares (the predecessor project by EOS developer BM). So I carefully studied EOS’s ICO on Ethereum.
During the 350-day extended ICO period, EOS was also tradable directly on exchanges. This meant both primary and secondary markets operated simultaneously. However, prices between the two markets didn't always align.
This created potential arbitrage opportunities.
At the time, I would deposit ETH into the ETH ICO contract daily, claim EOS-ERC20 tokens when available, then immediately deposit them to exchanges and sell.
This simple arbitrage strategy involved no hedging or complex tactics—just betting that the primary market price would consistently be cheaper than the secondary market price—and surprisingly, it kept generating profits.
This profitable period lasted a long time. For the first three months, I never lost a single trade. But later on, occasional losses began to appear, and half a year later, I quit.
Why was I confident initially that the primary market price would be lower? Because very few people actually bought tokens through the ICO contract.
In the beginning, checking on-chain interaction addresses showed fewer than 100 per day. For most of the first three months, it hovered around 148 addresses—I remember that number clearly. Later, the number increased, and profits disappeared.
During this primary-secondary price arbitrage game, I also observed hacker behavior targeting the blockchain—all in pursuit of profit.
Given the 23-hour cycle ending regularly, in the final minutes of each round, it was possible to calculate the primary market price since the total ETH in the contract was transparent. By comparing this with the secondary market price, one could determine whether an arbitrage opportunity existed.
As a result, large amounts of ETH would suddenly flood into the contract in the last few minutes, potentially driving up the primary market price.
Every time those final minutes approached, hackers would craft transactions designed to consume massive amounts of ETH gas, clogging the entire Ethereum network and preventing others from depositing ETH into the EOS ICO contract.
After one failed deposit attempt, I learned my lesson. Whenever racing to secure primary market allocation near deadline, I set my gas price to maximum—an expensive habit. After losing gas fees several times, I stopped playing this game and let others compete. I’d done my best.
That six-month-long arbitrage battle indeed earned me some money, but as benefits and drawbacks often go hand in hand, reflecting years later revealed lasting negative consequences.
Because the EOS ICO had a 23-hour cycle, the claim timing shifted forward by one hour each day. Thus, the time to race for primary allocation and claim tokens constantly changed, meaning roughly one-third of the cycles occurred during my normal sleeping hours.
But chasing profits left no room for sleep—whether midnight or 3 a.m., I'd wake up and act.
Occasional熬夜 isn’t a big deal, but doing it continuously for weeks becomes problematic. And this wasn’t ordinary熬夜—it came with significant financial stakes, leaving me either extremely excited or furious after each round...
Of course, it wasn’t just my health that suffered; I suspect there were even worse downstream effects.
At the time, I was leading a small team working on a project. But seeing me behave like this daily, if the boss wasn’t committed, why should anyone else try hard?
Looking back, we actually had a chance to succeed with that project, but I messed it up and let my teammates down. In 2018, several of them left voluntarily.
Thinking about it, I realized I’m actually quite fragile. That experience took away my courage to lead teams ever again.
Just this year, seeing Musk enter politics so publicly, I thought—his companies including Tesla, X.com, and SpaceX might suffer. It’s a loss for the world. If the CEO doesn’t focus on running the company, success is unlikely.
This experience also had another side effect.
It was 2017, the peak of the BTC scaling debate. I was a staunch supporter of larger blocks and enjoyed writing articles advocating for scaling.
Perhaps because I profited from EOS arbitrage, I became arrogant. Add chronic sleep deprivation, and my writings and group discussions likely came off as overly aggressive, offending many people.
Later, I became a victim of online harassment. That experience made me much less courageous online.
To this day, I still feel timid online—I don’t dare to fight back or insult others anymore.
Two incidents from that time remain deeply etched in my memory.
One was when the RSK (Bitcoin sidechain project) team visited China for speaking events. Since I had written extensively about sidechains before, they invited me to join their tour. Over the phone, I rudely criticized their lack of commitment to scaling. Ah, how presumptuous I was—what an idiot.
The night before that call, I was up at 3 a.m. working on the EOS ICO, too excited to sleep. When the call came, I had no energy to speak politely.
Another time, a journalist from a certain newspaper called me for an interview on scaling. I ranted aggressively: "Do you dare publish my exact words? I’ve said many things unfavorable to small-block supporters." Ah, perhaps sticking purely to technical arguments would have been better.
I was too full of myself back then, though I’ve always considered myself a humble person.
Time flies. Eight years have passed since the EOS ICO. The money I earned has long been lost. Only memories remain.
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