Successful “sandwich bot” attacks first became widely known in 2021, thanks to a study by Eden Network.
With the help of special bots, an attacker tracks transfers in a pool of unconfirmed transactions in any of the blockchains of interest.
Then, when the bot finds a large order, which will inevitably lead to a change in the price of the asset, it redeems this asset in advance at a more favorable rate, “pushing” its transaction before the original trader’s order at the expense of an increased commission.
After the order is executed and the price changes, the attacker sells the asset at a profit.
Because all the processes are automated and take place almost instantaneously, the trader has no time to react or does not notice the catch.
The surge of interest from inexperienced investors in memtokens, as well as the competition for profits, only makes it easier for “sandwich bots”.
Specifically, the bot, named jaredfromsubway.eth, has earned about $1.7 million so far, including on PEPE memtoken transactions.
Cumulatively, this sandwich bot has spent about $7 million in commissions on more than 180,000 transactions in the past two months to get ahead of the trades.
Part of the cryptocurrency community sees “sandwich bot” attacks as inevitable.
The other one is sure that this is a huge problem, which attracts very little attention from traders and will probably lead to an exodus of users in the long run.
“Sandwich bot tactics are no different than advance trading, an illegal practice in which traders use insider information to bypass large buy orders and make profits.
“If sandwich attacks were considered theft like other break-ins, they would rank second in terms of damage,” an investor who wished to remain anonymous told reporters.
Earlier, Bits.Media published a piece on the principles of making money from cryptocurrency, the choice of the object of investment and the style of trading.