Cryptocurrency trading can be complicated and risky, and recent events have shed light on the fact that the use of bots may even increase the risks. This was highlighted by blockchain security firm CertiK earlier this week when it reported that several bots using a “sandwich trading” strategy were hacked, leading to a loss of over $25 million worth of digital assets.

Maximal Extractable Value (MEV) bots employ a strategy called “sandwich trading” in which they spot when traders are attempting to purchase tokens, and get between the trade to earn a small profit. However, unfortunately for the bots involved in this exploit, the reverse trades were replaced by a rogue, unknown validator which led to their loss. Among the assets lost were, Wrapped Bitcoin (WBTC), USD Coin (USDC), Tether (USDT), DAI (DAI), and Wrapped Ether (WETH), with the majority of the funds being transferred to three different wallets.

This incident is believed to be one of the biggest that have been recorded involving MEV bots since September 2022. It will likely have a big impact on other MEV seekers who use similar strategies, such as the recently exposed “sandwich trading”, as they will be more wary in future.

Similar to this incident, hackers were also able to exploit a vulnerability in an MEV bot’s code which caused it to lose Ether worth $1 million an hour after initially earning 800 Ether through arbitrage trades. This highlights why caution is key in this uncertain cryptosphere as even bots can be exposed to exploiting vulnerabilities.

Those who have hodled their digital funds during the crypto winter, can not only be exposed to financial losses but also mental health related issues due to the increased stress and uncertainly. It is thus important to be as informed as possible and take all the necessary precautions in order to minimize potential losses.



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