Kraken's ETH To XETH Conversion: A Trading Pitfall

Are you experiencing difficulties trading ETH on Kraken? You're not alone. This guide delves into a common issue faced by traders using the Kraken exchange, specifically when dealing with ETH and its representation as XETH via the REST API. We'll explore the root cause of the problem, the error message, and how to potentially address it within the context of automated trading strategies, like those using the infinity-grid library. This article aims to break down the complexities, offering clarity and actionable insights for both novice and experienced traders. It is designed to help understand why you might encounter issues and how to troubleshoot them effectively.

The Core Issue: ETH vs. XETH on Kraken

At the heart of the problem lies Kraken's internal representation of ETH. While you might be familiar with trading ETH directly, the exchange sometimes handles it as XETH behind the scenes, especially through its REST API. This difference can throw a wrench into automated trading bots or strategies that expect to work directly with ETH. When your trading algorithm uses ETH as the base currency, Kraken's API might not recognize or correctly interpret it. This mismatch leads to errors, preventing the algorithm from placing trades or functioning as intended. Understanding this distinction is the first step toward resolving the issue.

Understanding the Error Message

The error message provided in the original context highlights the problem: infinity_grid.exceptions.BotStateError: Could not find altname for base 'ETH' or quote 'USD' currency. This error suggests that the trading bot, likely built with the infinity-grid library, is unable to determine the correct trading pair parameters for ETH/USD. The bot expects to find a specific 'altname' or alternative name for the trading pair (ETH/USD in this instance), but it fails to do so. This typically happens because the API is expecting XETH instead of ETH, leading to a breakdown in the communication between the bot and the exchange. The error prevents the bot from correctly truncating order prices, thus halting the trading process.

Deep Dive into the Code: Where Things Go Wrong

Let's break down the relevant parts of the code snippets to see where the problem originates. This analysis will help you understand the precise points of failure and how you might start to address them. The code provided offers crucial clues as to what is going on behind the scenes.

The error is happening inside the infinity_grid library. The new_buy_order method, responsible for initiating buy orders, calls a truncate method from the Kraken exchange adapter. The truncate function seems to be where the issue is. It is trying to find the rest_altname (alternative name used by Kraken's REST API) for a given trading pair. The rest_altname method depends on rest_symbol, which extracts the base and quote currencies. The error comes when the rest_symbol fails to find the correct altname for ETH. The code then throws the BotStateError. The main problem is that the library is not correctly mapping ETH to XETH or the appropriate internal representation that Kraken uses within its REST API.

Code Snippet Analysis

Examining the code, specifically the truncate function within the kraken.py file, provides a clearer picture of the issue. The code attempts to find the trading pair by splitting the rest_symbol into base and quote currencies. This is where the code might fail if it's expecting ETH when Kraken uses XETH. The rest_symbol property is crucial because it defines the trading pair format expected by the Kraken API. The library needs to recognize this difference and convert the currency identifiers correctly. If ETH is not correctly translated to the format Kraken's API uses (which could be XETH or another internal identifier), the BotStateError is triggered. This shows the importance of correct pair identification. The library must accurately interpret how Kraken represents its assets. This often involves looking up the correct symbol or alternative name for each trading pair.

Addressing the Trading Glitch: Possible Solutions

So, how do we get around this roadblock and make sure your trading bot can trade ETH on Kraken? There are a few approaches you can consider.

1. Modifying the Trading Bot Configuration

The most straightforward solution could be adjusting the configuration of your trading bot to correctly identify and use XETH (or whatever identifier Kraken uses) instead of ETH. This could involve updating the base currency setting in your bot's configuration to `