MEV Bot
Last updated
Last updated
MEV bots employ several key strategies to extract value:
Frontrunning: Observing pending transactions and placing their own transaction ahead with higher gas fees to execute first.
Backrunning: Placing transactions immediately after a significant transaction that creates a profitable opportunity.
Sandwich Attacks: Combining frontrunning and backrunning by placing transactions both before and after a target transaction to manipulate prices and profit from the difference.
Arbitrage: Exploiting price differences of the same asset across different decentralized exchanges (DEXs) by buying low on one platform and selling high on another.
These bots operate on various blockchain networks, with Ethereum being the most prominent due to its high transaction volume and value.
One of the most notable success stories is the MEV bot operated by the address "jaredfromsubway.eth," which generated millions in profit through sandwich attacks. This bot specifically targeted users trading on decentralized exchanges, inserting transactions before and after user trades to capture price differences. In just a few months of operation in 2023, this bot reportedly generated over $3.4 million in profit, demonstrating the immense potential of well-executed MEV strategies.
In a remarkable case study, MIT students identified a vulnerability in blockchain validation that allowed them to extract approximately $25 million in cryptocurrency within just 12 seconds. Their MEV bot was programmed to identify specific transaction patterns and exploit them at high speed, showcasing both the technical sophistication and lucrative potential of MEV extraction when executed by knowledgeable operators.
Flashbots, a research organization focused on mitigating the negative externalities of MEV, created a system that allows traders to submit transaction bundles directly to miners/validators. One notable success case involved a sophisticated arbitrage bot that utilized Flashbots bundles to execute over 10,000 profitable arbitrage transactions in a single month, generating consistent returns regardless of market conditions by exploiting temporary price inefficiencies across multiple DEXs. The bot reportedly achieved an average return of 0.05-0.2% per transaction, which accumulated to substantial profits due to the high frequency of execution.
As blockchain ecosystems expanded, some advanced MEV bots began operating across multiple chains. One documented success case involved a bot that monitored price discrepancies between Ethereum and Binance Smart Chain, executing arbitrage opportunities through cross-chain bridges. During a period of high volatility in early 2022, this bot reportedly generated over $1.2 million in profit within a two-week window by exploiting price differences of popular tokens across these networks.