Media: "Sandwich bots" stole millions of dollars from memcoin investors

Article reading time:
2 minutes.

Automated programs called "sandwich bots" have made millions of dollars by bypassing lucrative buy orders for popular crypto assets.

For the first time, successful attacks by “sandwich bots” becamewidely known in 2021 thanks to a study by the Eden Network. With the help of special bots, the attacker tracks transfers in the pool of unconfirmed transactions in any of the blockchains of interest to him. Then, when the bot finds a large order that will inevitably lead to a change in the price of an asset, it buys this asset in advance at a better rate, “pushing” its transaction in front of the trader’s original 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. Since all processes are automated and take place almost instantly, the trader does not have time to react or does not notice the catch at all.

A surge of interest from inexperienced investors inmemtokens, as well as competition for profits, only make it easier for "sandwich bots". In particular, the bot, named jaredfromsubway.eth, has so far earned about $1.7 million, including transactions with the PEPE memtoken. Cumulatively, over the past two months, this “sandwich bot” has spent about $7 million in fees for executing over 180,000 pre-trade transactions.

Part of the crypto community perceives attacks fromsides of "sandwich-bots" as inevitable. Another believes that this is a huge problem that attracts very little attention from traders and is likely to lead to a churn of users in the long term.

“The tactics of sandwich bots are no different fromlookahead trading, an illegal practice in which traders use insider information to bypass large buy orders and profit. If “sandwich attacks” were considered theft, like other hacks, then they would take second place in terms of damage,” the investor, who asked to remain anonymous, told reporters.

Earlier, the Bits.Media portal published a material on the principles of making money on cryptocurrency, choosing an investment object and trading style.

</p>