Everyone is talking about ListaDAO's arbitrage profits, but no one mentions the despair during liquidation. I almost became the one forced to liquidate. Today, I’ll share the three pitfalls I fell into, hoping you won’t have to pay tuition like I did.

**Pitfall 1: Only look at the profit numbers, ignore the liquidation price—this is the life and death line**

I collateralized BTCB to borrow USD1 for arbitrage, with only the yield in my eyes. But I overlooked a critical data point—the liquidation price. This thing is like a buried landmine; once BTC drops to that point, the system will automatically sell your collateral to repay the debt, and you’ll still face penalties. One night, during a market crash, my liquidation line was pushed to the brink, just a few dollars away from liquidation, and I was woken up by the scare. This isn’t alarmist talk; it’s real market risk.

**Pitfall 2: The 0.41% interest rate is a bait, not a floor price**

Seeing the USD1 loan with only 0.41% interest, I jumped in without hesitation. But this strategy became too popular; as more people followed, the interest rate skyrocketed, eventually exceeding 2%. Although still lower than some Earn yields, the profit margin was halved. This is the truth of DeFi—interest rates are market games, not fixed protocol guarantees. When more funds flow into the pool, costs naturally rise.

**Pitfall 3: The hidden costs of cross-platform operations are beyond your calculation**

The entire arbitrage process is: Borrow from ListaDAO → Transfer to Binance for Earn. Sounds simple, but there are hidden time traps. Deposits and withdrawals require network confirmations, so funds are idle during transit. Even more painful is that if you need to repay urgently to avoid liquidation, you have to withdraw from Binance, and those few minutes of delay could determine life or death. Gas fees, slippage, network latency—these are invisible costs eating into your profits.

**My 3 survival rules**

1. Always manually calculate the liquidation price and set price alerts. Don’t rely on protocol notifications; keep a close eye on this number.

2. Keep collateralization below 50%. Leave enough buffer for market volatility; don’t be greedy.

3. Include gas fees, network delays, and operational costs in your calculations. Gross profit is fake; net profit is real gold and silver.

Protocols like ListaDAO are not the problem; the tools themselves are sharp. But a sharp tool used improperly can hurt you. Every high-yield strategy comes with proportional risks. Never go all-in blindly, never hold full positions, never leverage excessively. These are lessons paid for with real money.