Bread and butter are lost by sandwich trade bots in a $25 million fraud
The CertiK team revealed that this is one of the biggest MEV bot exploits they’ve seen since September 2022.
A rogue validator outsmarted Maximal Extractable Value (MEV) bots that were trying to do “sandwich trades,” which caused $25 million worth of digital assets to be lost.
In a tweet, blockchain security company CertiK pointed out that bots trying to “sandwich” transactions—finding out when traders are trying to buy tokens and getting in the middle of the trade to make money—lost a huge amount of cryptocurrency because a verifier went bad.
CertiK says that when the bots started trading millions of dollars, the reverse transfers were replaced by a validator. In the end, $1.8 million in Wrapped Bitcoin (WBTC), $5.2 million in USD Coin, $3 million in Tether, $1.7 million in Dai, and $13.5 million in Wrapped Ether were lost because of this. (WETH). At the time this was written, most of the money had been moved to three different wallets.
CertiK explained how the attack happened in more depth in a Twitter thread. The security company said that the problem was caused by the fact that the validators had too much power. As the MEV bots tried to make money by doing a front-run and a back-run, the rogue validator moved in to back-run the MEV’s transaction, which caused the losses.
The CertiK team told the sources that this is one of the biggest attacks on MEV bots that they have seen since September 2022. They told us that:
“Since MEV bot exploits began in September 2022, we’ve recorded a total of about $27 million, with this event making up the vast majority.”
The CertiK team also pointed out that this could have an effect on other MEV searchers who use tactics like sandwich trading. “MEV searchers might be afraid to use non-atomic strategies like sandwich trading, since this exploit only really affects this strategy,” the team said.
MEV bots have the ability to earn a lot of digital assets, but they can also be hacked or used in other ways. On September 28, 2022, a MEV bot did arbitrage deals and made 800 Ether, which was worth $1 million at the time. After an hour, a thief found a weakness in the bot’s code and used it to steal everything.