Crypto trader gets sandwich attacked in stablecoin swap, loses $215K

A crypto trader fell unfortunate to a sandwich onslaught portion making a $220,764 stablecoin transportation connected March 12 — losing astir 98% of its worth to a Maximum Extractable Value (MEV) bot.

$220,764 worthy of the USD Coin (USDC) stablecoin was swapped to $5,271 of Tether (USDT) successful 8 seconds arsenic the MEV bot successfully front-ran the transaction, banking implicit $215,500.

Data from Ethereum artifact explorer shows the MEV onslaught occurred connected decentralized speech Uniswap v3’s USDC-USDT liquidity pool, wherever $19.8 cardinal worth of worth is locked.

Details of the sandwich onslaught transaction. Source: Etherscan

The MEV bot front-ran the transaction by swapping each the USDC liquidity retired of the Uniswap v3 USDC-USDT pool and past enactment it backmost successful aft the transaction was executed, according to laminitis of The DeFi Report Michael Nadeau.

The attacker tipped Ethereum artifact builder “bob-the-builder.eth” $200,000 from the $220,764 swap and profited $8,000 themselves, Nadeau said.

DeFi researcher “DeFiac” speculates the aforesaid trader utilizing antithetic wallets has fallen unfortunate to a full of six sandwich attacks, citing “internal tools.” They pointed retired that each funds traveled from borrowing and lending protocol Aave earlier being deposited connected Uniswap.

Two of the wallets fell unfortunate to an MEV bot sandwich onslaught connected March 12 astatine astir 9:00 americium UTC. Ethereum wallet addresses “0xDDe…42a6D” and “0x999…1D215” were sandwich attacked for $138,838 and $128,003 successful transactions that occurred 3 to 4 minutes earlier.

Both transactors made the aforesaid swap successful the Uniswap v3 liquidity pool arsenic the trader who made the $220,762 transfer. 

Others speculate the trades could beryllium attempts astatine wealth laundering.

“If you person NK illicit funds you could conception a precise mev-able tx, past privately nonstop it to a mev bot and person them arb it successful a bundle,” said laminitis of crypto information dashboard DefiLlama, 0xngmi.

“That mode you lavation each the wealth with adjacent to 0 losses.”

Related: THORChain astatine crossroads: Decentralization clashes with illicit activity

While initially criticizing Uniswap, Nadeau aboriginal acknowledged that the transactions didn’t travel from Uniswap's beforehand end, which has MEV extortion and default slippage settings.

Nadeau backtracked connected those criticisms aft Uniswap CEO Hayden Adams and others clarified the protections Uniswap has successful spot to combat against sandwich attacks.

Source: Hayden Adams

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