= SPEC-001: Kraken Funding Rate Arbitrage Bot :sectnums: :toc:
== Background
The goal of this project is to create a locally hosted web application using Node.js that serves as a funding rate arbitrage bot for the Kraken cryptocurrency exchange. This bot will monitor funding rates in real-time, identify arbitrage opportunities, and alert users to these opportunities. In the future, the application may be expanded to include other exchanges, but the initial focus is solely on Kraken.
== Requirements
Must Have:
- Real-time data fetching from Kraken
- Display of funding rates and arbitrage opportunities
- Notification system using Discord for alerting on potential arbitrage opportunities
Should Have:
- Dashboard with charts to visualize funding rates
- Tables to list arbitrage opportunities
- Basic and clean design using a popular UI framework like React
Could Have:
- Historical data analysis
- Advanced user settings and preferences
- Integration with other exchanges
Won't Have:
- User authentication and registration (single-user system)
- Expansion to other exchanges (initially)
== Method
=== Architecture Design
The application will be designed using a modular architecture to ensure scalability and ease of maintenance. The primary components of the architecture are:
- Frontend: A React-based user interface.
- Backend: A Node.js server to handle API requests and business logic.
- Database: MongoDB for storing historical funding rates and arbitrage opportunities.
- APIs: Integration with Kraken's APIs for fetching real-time data.
- Notification System: Integration with Discord to send alerts.
[plantuml] @startuml package "Frontend" { [React Application] }
package "Backend" { [Node.js Server] [Arbitrage Module] }
package "Database" { [MongoDB] }
package "External APIs" { [Kraken API 1] [Kraken API 2] }
package "Notification System" { [Discord Bot] }
[React Application] --> [Node.js Server] : "User Interactions" [Node.js Server] --> [Arbitrage Module] : "Arbitrage Logic" [Node.js Server] --> [MongoDB] : "Data Storage" [Arbitrage Module] --> [Kraken API 1] : "Fetch Real-time Data" [Arbitrage Module] --> [Kraken API 2] : "Fetch Real-time Data" [Arbitrage Module] --> [Discord Bot] : "Send Notifications" @enduml
=== Database Schema
The MongoDB database will have the following collections:
- FundingRates: To store funding rates fetched from Kraken.
- ArbitrageOpportunities: To store identified arbitrage opportunities.
Schema definitions:
// FundingRates collection schema
const fundingRateSchema = new mongoose.Schema({
timestamp: Date,
rate: Number,
pair: String
});
// ArbitrageOpportunities collection schema
const arbitrageOpportunitySchema = new mongoose.Schema({
timestamp: Date,
pair: String,
rateDifference: Number,
opportunityDetails: String
});
=== Components
- React Application: Provides the user interface for interacting with the bot, including dashboards, charts, and tables.
- Node.js Server: Handles API requests and implements the business logic for arbitrage.
- Arbitrage Module: Implements the logic for fetching data from Kraken, analyzing funding rates, and identifying arbitrage opportunities.
- Notification System: Sends alerts to users about potential arbitrage opportunities via Discord.
== Implementation
=== Step 1: Setup Development Environment
- Install Node.js and npm (Node Package Manager) on your local machine.
- Install MongoDB and start the MongoDB server.
- Set up a new Node.js project and initialize it with
npm init
. - Install necessary dependencies:
npm install express mongoose axios npm install react react-dom npm install @discordjs/rest discord-api-types discord.js
=== Step 2: Develop Backend
-
Initialize Express Server:
- Create an Express server to handle API requests.
const express = require('express'); const mongoose = require('mongoose'); const bodyParser = require('body-parser'); const app = express(); app.use(bodyParser.json()); mongoose.connect('mongodb://localhost:27017/arbitrageBot', { useNewUrlParser: true, useUnifiedTopology: true }); app.listen(3000, () => { console.log('Server running on port 3000'); });
-
Fetch and Store Data from Kraken:
- Use Axios to fetch data from Kraken APIs and store it in MongoDB.
const axios = require('axios'); async function fetchFundingRates() { const response = await axios.get('KRACKEN_API_URL_1'); // Process and store data in MongoDB } async function fetchArbitrageOpportunities() { const response = await axios.get('KRACKEN_API_URL_2'); // Process and store data in MongoDB } setInterval(fetchFundingRates, 60000); // Fetch every minute setInterval(fetchArbitrageOpportunities, 60000); // Fetch every minute
-
Discord Notification System:
- Set up a Discord bot and use it to send notifications.
const { Client, Intents } = require('discord.js'); const client = new Client({ intents: [Intents.FLAGS.GUILDS, Intents.FLAGS.GUILD_MESSAGES] }); client.once('ready', () => { console.log('Discord bot is ready'); }); async function sendDiscordNotification(message) { const channel = client.channels.cache.get('YOUR_DISCORD_CHANNEL_ID'); if (channel) { channel.send(message); } } client.login('YOUR_DISCORD_BOT_TOKEN');
-
Arbitrage Logic:
- Implement the logic to analyze funding rates and identify arbitrage opportunities.
function analyzeArbitrage() { // Fetch data from MongoDB, analyze it, and identify opportunities // Use sendDiscordNotification to alert users } setInterval(analyzeArbitrage, 60000); // Analyze every minute
=== Step 3: Develop Frontend
-
Create React Application:
- Set up a new React application to provide the user interface.
npx create-react-app arbitrage-bot-ui cd arbitrage-bot-ui npm start
-
Develop UI Components:
- Implement components for displaying funding rates and listing arbitrage opportunities.
// Example: Display Funding Rates Component import React, { useEffect, useState } from 'react'; import axios from 'axios'; function FundingRates() { const [rates, setRates] = useState([]); useEffect(() => { async function fetchData() { const response = await axios.get('/api/funding-rates'); setRates(response.data); } fetchData(); }, []); return ( <table> <thead> <tr> <th>Pair</th> <th>Rate</th> <th>Timestamp</th> </tr> </thead> <tbody> {rates.map(rate => ( <tr key={rate.timestamp}> <td>{rate.pair}</td> <td>{rate.rate}</td> <td>{new Date(rate.timestamp).toLocaleString()}</td> </tr> ))} </tbody> </table> ); } export default FundingRates;
=== Step 4: Testing and Deployment
-
Testing:
- Test each component and integration point thoroughly.
- Perform system testing to ensure all requirements are met.
-
Deployment:
- Deploy the Node.js server and MongoDB instance locally.
- Serve the React application using a tool like
serve
.
npm install -g serve serve -s build
== Milestones
- Week 1: Setup development environment and create initial project structure.
- Week 2: Implement backend services including data fetching and notification system.
- Week 3: Develop frontend components and integrate with backend.
- Week 4: Implement arbitrage logic and finalize the application.
- Week 5: Testing and deployment.
== Gathering Results
To evaluate whether the requirements were addressed properly and the performance of the system post-production:
- User Feedback: Collect feedback on the usability and effectiveness of the bot.
- System Monitoring: Monitor the performance and accuracy of arbitrage detection.
- Bug Fixes and Enhancements: Address any issues and implement necessary improvements based on feedback.