An Ethereum bot operated by the pseudonymous crypto user Jaredfromsubway.eth has earned $40 million in just three months using a technique called “sandwiching” on decentralized exchanges (DEX).
The bot operated by Jaredfromsubway.eth is a so-called MEV bot designed to use “sandwiching” techniques – essentially front-running other traders – on DEXs where Popular meme coins like Pepe Coin (PEPE) business is done.
MEV is short for Maximum Extractable Value, and represents the maximum amount of value that can be extracted from a block on the Ethereum blockchain by reordering, inserting or censoring transactions within the block.
according to a reports by EigenPhi, a site that analyzes decentralized finance (DeFi) in the market, JaredFrom Subway’s bot earned a total of $40 million over the course of 3 months by front-running and holding the correct tokens.
After deducting the blockchain fee of approximately $6 million, the total profit comes to $34 million.
“The bot is not limited to sandwich attacks; It also holds some altcoins in back-run trading when their prices are rising. For example, by holding PEPE, the bot is able to generate even more profit,” the EigenPhi report said.
Increasing transaction fees due to BOT
The bot has been extremely active since its creation in February, and transactions from the bot are now present in over 60% of all Ethereum blocks.
The massive number of bot-generated transactions has also led to a significant increase in transaction fees on the Ethereum network this year, with average fees reaching more than $27 last Saturday.
Success comes from “skill, strategy and technique”
According to the pseudonymous crypto developer known as Nox, the success of these types of bots comes as a result of “skill, strategy, and technique.”
MEV bots have been profitable by taking advantage of information about transactions that have been executed in the past, often through arbitrage trading that capitalizes on price differentials between decentralized exchanges.
MEV bots using “sandwiches” basically front-run other trades, buying currency slightly cheaper than other traders, resulting in their practices being seen as an “invisible” tax on regular DEX users. goes.
To date, 27 Ethereum-based projects have joined forces to launch MEV Blocker, which aims to reduce the value extracted from traders by MEV bots.
Last month, stablecoin issuer Tether took action and blacklisted ethereum validator addresses MEV is linked to bots withdrawing $25 million worth of crypto from DEXs.