Arbitrage and Pool Balancing

Arbitrageurs play a crucial role in maintaining the health and efficiency of the Ouija Protocol. They help balance the liquidity pool by executing reverse swaps, increasing the pool's Borrowing Power (BP) and Health Factor (HF) and restoring equilibrium.

For example, assume the pool's BP and HF have been reduced due to a previous swap. An arbitrageur can perform a reverse swap, bringing in higher BP tokens and balancing the pool. This process not only benefits the pool but also rewards the arbitrageur, as they profit from the temporary price inefficiencies.