An Ethereum bot run by anonymous crypto user jaredfromsubway.eth made $40 million in three months using a technique called “sandwiching” on decentralized exchanges (DEX).
The bot operated by Jaredfromsubway.eth is a MEV bot designed to use “sandwich” techniques – essentially the leads of other traders – on the DEX where popular meme coins such as Pepe Coin (PEPE) are traded .
MEV is short for Maximum Minimum Value, and represents the maximum amount of value that validators can remove from a block on the Ethereum blockchain, reorder, insert, or censor transactions within the block.
According to a report by Egenfi that analyzes the Decentralized Finance (DFI) market, JaredFromSubwayBot earned a total of $40 million in 3 months with front running and accurate signals.
When you subtract the roughly $6 million in blockchain fees, the total profit becomes $34 million.
“The bot is not limited to carrying out sandwich attacks, it also holds some altcoins in subsequent trades as their value increases. For example, by holding PEPE, the bot can make higher profits,” EigenPhi reports. Is.”
Rising transaction fees caused by bot
The bot has since its creation in February become extremely active, and transactions from the bot are now present in more than 60% of all Ethereum blocks.
MEV bots have in the past been profitable by leveraging information about transactions that are about to be executed, often through arbitrage trading that capitalizes on price differences between decentralized exchanges.
MEV bots utilizing “sandwich” attacks basically front-run other trades, purchasing currency slightly cheaper than other traders, which results in their practices being viewed as a form of “invisible” tax on regular DEX users.
To date, 27 Ethereum-based projects have joined forces to launch MEV Blocker, aiming to minimize the value extracted from traders by MEV bots.
Last month, stablecoin issuer Tether took action and blacklisted an Ethereum validator address linked to $25 million worth of crypto drained from DEXs with MEV bots.