A bot for the Ethereum blockchain that is operated by the pseudonymous cryptocurrency user Jaredfromsubway.eth employing a strategy called “sandwiching” on decentralized exchanges (DEXs), Ethereum was able to generate revenue of $40 million in just three months.
The automated system is managed by Jaredfromsubway.eth is a so-called MEV bot that was developed to exploit “sandwiching” strategies, also known as “front-running” other traders, on DEXs where popular meme coins like Pepe Coin (PEPE) are traded. These techniques allow eth to gain an advantage over other dealers.
MEV is an abbreviation that stands for maximal extractable value. It refers to the maximum amount of value that validators on the Ethereum blockchain are able to extract from a block by reordering, adding, or censoring transactions that are contained within blocks.
According to a report published on EigenPhi, a website that does research on the market for decentralized finance (DeFi), jaredfromsubway’s bot made a total of $40 million over the course of the three months by front-running and holding on to the appropriate tokens. This was accomplished by combining the two strategies.
The overall profit is estimated to be around $34 million once blockchain transaction costs of approximately $6 million are deducted.
“The bot is not limited to performing sandwich attacks; it also holds onto some of the altcoins in the back-run transactions when their prices are increasing.”  “The sandwich attack is not the only thing the bot can do.” According to the research published by EigenPhi, “the bot is able to generate even more profits by, for instance, continuing to hold onto PEPE.”
Since its inception in February, the bot has seen a significant increase in activity, to the point that transactions generated by the bot are now included in more than sixty percent of all Ethereum blocks.
The enormous number of transactions that were produced by the bot over this year has also resulted in a discernible increase in the transaction fees that were paid on the Ethereum network. The average cost paid reached a high of more than $27 on the most recent Saturday.
The success of these kinds of bots, according to a fictitious crypto developer who goes by the name Nox, is down to “skill, strategy, and tech.”
MEV bots have historically been profitable because they make use of information about pending transactions. This is typically done through arbitrage trading, which takes advantage of price disparities between decentralized exchanges.
The activities of MEV bots that use “sandwich” assaults are seen as a type of “invisible” tax on normal DEX users because these bots effectively front-run other deals by purchasing currency slightly cheaper than other traders.
To date, 27 Ethereum-based projects have collaborated on the introduction of MEV Blocker with the intention of reducing the amount of value that is taken from traders by MEV bots.
Tether, the stablecoin issuer, took action and blacklisted an Ethereum validator address last month after discovering that MEV bots were responsible for the theft of $25 million worth of cryptocurrency from DEXs.
© 2015-2023 Coinposters. All rights reserved!