How MEV Bots Lost a Whopping $20M in a Sandwich Attack

A large Ethereum MEV bot was targeted in a sandwich attack on Sunday, netting an attacking validator roughly $25 million in funds. 

  • A sandwich attack is when an attacker places a large trade on either side of a target’s transaction, manipulating the price and profiting from the price change. 
  • In this case, the money was taken from maximal extractable value (MEV) bots  – bots focused on rearranging transactions within a block to maximize the profits it generates for validators. 
  • At Ethereum block 16964664 on Sunday, 8 separate blockchain addresses executed 8 sandwich attacks involving 3 transactions each, for a total of 24 transactions. This series of transactions appeared to deliberately steal funds from an MEV bot attempting to front-run the block and gain more value. 
  • The attacking validator was able to back-run the MEV bot’s original back-run transaction with a new back-run transaction, thus canceling the initial back-run transaction of the MEV bot. 
  • Data from blockchain security group PeckShield shows that the attacker transferred their profits to a separate blockchain address, which now holds roughly $20 million in funds. That includes $13.4 million in WETH, $3 million USDT, $1.8 million WBTC, and $1.7 million DAI. 
  • The attacker had been planning this attack for half a month. According to DeFi analysis platform EigenPhi, “the attacker “had completed eight purchases starting on March 17th, buying STG, AAVE, CRV, BIT, MKR, UNI, and other tokens with 0.07 ETH each.”
  • The validator of the targeted block went offline after epoch 191813. It will be able to withdraw its staked ETH when the Ethereum Shapella upgrade goes live next month. 

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