TLDR:
- An MEV bot used a $11.9 million flash loan for a sandwich attack.
- The bot went after a user exchanging $5,000 worth of Shuffle (SHFL) tokens.
- Even though the loan amount was substantial, the bot's gain whittled down to $20 after accounting for gas fees.
- The entire attack was executed in 14 transactions within a single block (12 seconds)
- MEV bots have been lucrative assets, with one raking in more than $1 million in just one week.
A maximal extractable value (MEV) bot recently pulled off a sandwich attack using an enormous $11.9 million flash loan. only to walk away with a mere $20 profit.
This case, reported by Arkham Intelligence on September 5, underscores the risky field of MEV operations where profits can be slim.
An MEV Bot recently secured a $12 million flash loan, profiting less than $20.
It tactically sandwiched a transaction where a user tried swapping $5K from SHFL to WETH with around 2% price slippage.
Unlucky. pic.twitter.com/I1llVBN4fH
— Arkham (@ArkhamIntel) September 5, 2024
The bot borrowed $11.97 million in Wrapped Ether (WETH) to sandwich a user's $5,000 SHFL token swap.
A sandwich attack involves strategically placing transactions around a key trade to exploit price gaps.
In this scenario, the MEV bot completed 14 intricate transactions, including lending and borrowing $700,000 in USDC and WETH at Aave and Uniswap.
Confirming the transactions within one Ethereum block, the bot wrapped up its maneuvers in about 12 seconds.
Despite the major loan and intricate planning, the bot's profit margin was minimal.
Once gas fees — the essential transaction costs on Ethereum — were factored in, the bot realized just over $20 in profit.
This result contrasts sharply with some previous MEV exploits that garnered substantial profits.
For instance, in April 2023, A bot operator named 'jaredfromsubway' allegedly amassed over $1 million in one week by deploying sandwich attacks on traders of popular meme currencies like Pepe (PEPE) and Wojak (WOJAK).
Orchestrating a sandwich attack demands precise timing and flawless execution. A user's transaction heads to a mempool before hitting the blockchain.
The attacker then creates two transactions — an initial one with a high gas fee to ensure precedence, followed by a lower-fee transaction after the target deal.
This strategy profits from buying low prior to the victim’s transaction and selling high immediately afterwards.
However, as the recent example shows, this tactic doesn't always deliver ample returns, especially after accounting for gas.
The blockchain analytics firm Arkham Intelligence highlighted this instance, showcasing blockchain's transparency and capacity for intricate transaction analysis.
