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Would it be possible to frontrun the hacker's transaction by quickly broadcasting an extremely high fee transaction from the bait address? They would not only r

Would it be possible to frontrun the hacker's transaction by quickly broadcasting an extremely high fee transaction from the bait address? They would not only reveal their intrusion, but they'd actually lose money, and some of the bait could be recovered

pcthrowaway 4y ago
Sort of. If using Ethereum for example, you could run your own ETH node and frontrun any transactions trying to transfer ETH out of one of your wallets. The attacker wouldn't lose money because they're using that wallet to pay the fees, so you'd be the only one paying the transaction fee. Also, if this became a standard, it's possible that attackers would find ways around it (it kind of becomes an arms race to see who can bribe miners the most). If your wallet contains no ETH, but contains for example, USDC, then they have to transfer their own ETH in to make a transaction to extract the USDC. This would work in theory, but it's such a common way to scam/hack people already that most attackers would be able to sniff out the honeypot. The typical scam is "leaking" the private key for a wallet that has, say, $30 of some valuable token in it (e.g. on reddit, discord, anywhere that less technical users congregate). When users import the key and realize they can transfer the token out, they only need to deposit some ETH to the wallet first to pay for gas fees. But when they do that, a script automatically sends the ETH somewhere else. Personally I see this being a potentially valuable way to manage servers, and also pay a non-critical bug bounty to black-hats. Each server can have its own crypto wallet, and the amount you fund it with varies based on how critical it is. If a compromise of one system occurs, you know immediately where the compromise occurred based on the address. The attacker gets a payday, and you get a lead on something you need to patch.
- FatalLogic 4y ago
  Interesting, thank you. And to avoid most risk, maybe the hackers could just mine the thieving transaction themselves? The hackers could operate a miner which privately adds that transaction every time it tries to solve a block, but broadcasts it only when they successfully got the block. It could be running for days before it succeeds, because there's probably no urgency. They can take all the fees, and it's difficult to frontrun because nobody knows the theft is happening until the block is already solved and it's almost too late.
  - pcthrowaway 4y ago
    I mean it's not like they're risking a massive amount of ETH on the first try, but if they saw it get stolen the first time, sure, they might try sniping the token by running/bribing a miner if the payout was great enough (there are networks of miners that let you include transactions without getting front-run by paying them a fee)
  - syzygyhack 4y ago
    You are correct. Actually in practice it is far less complicated to achieve this, at least for Ethereum. You can simply use the Flashbots RPC to bundle your transaction and have it sent straight to a miner. No exposure to the public mempool = no frontrunning possible, and no need to run your own miner/validator.
charcircuit 4y ago
>but they'd actually lose money What do you mean? The only outcome is that the company loses money due to giving it to miners.
- FatalLogic 4y ago
  You're right. As sibling comment says, in many cases, the attacker would attempt to pay the fee with funds from the address they were robbing. Though some token transfers might require the attacker to add their own funds. I was mistaken about that part.
  - deleted 4y ago
    [deleted]
desdiv 4y ago
The point of this type of honeypots is to entice the blackhats to just take the crypto and walk away. Making it harder for them to walk away with the money would be counter-productive. Old situation: blackhats sticks around for weeks or even months, exfiltrate data, blackmail, install crypto miners, etc. With crypto honeypot: blackhats take the crypto and leaves. With rigged crypto honeypots that are actually not redeemable: >on the hacker forums: >Guy A: "I tried to take the bitcoins from Corp A's honeypot wallet, but they broadcasted a high fee transaction and beat me to it." >Guy B: "Funny, same thing happened to me last week with Corp B's wallet." >Guy A: "Guess it's back to the old blackmail method then."
- FatalLogic 4y ago
  Yes, all correct. But if you offer a CEO the option of a defense that is just as effective, but also steals part of the bait money back? If the potential long-term cost is only hurting the corporation's reputation with a shadowy hacking group, and reducing the effectiveness of the defensive technique for everyone? Bottom line: I think we can guess which option a CEO would usually choose Remember that this method works best when it's not obvious that it is a tripwire, and may be best of all when it acts as a bribe to a greedy individual within a group of hackers.
- vmception 4y ago
  I don't know, it seems like if the corporation sent a high fee transaction they have already been alerted that their defenses need to be raised. so your attack vector has limited efficacy as it might be closed. the hackers need to have the foresight to sit in the server and accumulate other blackmail, but also not lose the chance to take the bitcoin bounty based on another hacker finding it.
X6S1x6Okd1st 4y ago
For ETH currently you could just use flashbots for front running protection

pcthrowaway 4y ago

Sort of. If using Ethereum for example, you could run your own ETH node and frontrun any transactions trying to transfer ETH out of one of your wallets. The attacker wouldn't lose money because they're using that wallet to pay the fees, so you'd be the only one paying the transaction fee. Also, if this became a standard, it's possible that attackers would find ways around it (it kind of becomes an arms race to see who can bribe miners the most). If your wallet contains no ETH, but contains for example, USDC, then they have to transfer their own ETH in to make a transaction to extract the USDC. This would work in theory, but it's such a common way to scam/hack people already that most attackers would be able to sniff out the honeypot. The typical scam is "leaking" the private key for a wallet that has, say, $30 of some valuable token in it (e.g. on reddit, discord, anywhere that less technical users congregate). When users import the key and realize they can transfer the token out, they only need to deposit some ETH to the wallet first to pay for gas fees. But when they do that, a script automatically sends the ETH somewhere else. Personally I see this being a potentially valuable way to manage servers, and also pay a non-critical bug bounty to black-hats. Each server can have its own crypto wallet, and the amount you fund it with varies based on how critical it is. If a compromise of one system occurs, you know immediately where the compromise occurred based on the address. The attacker gets a payday, and you get a lead on something you need to patch.

FatalLogic 4y ago
Interesting, thank you. And to avoid most risk, maybe the hackers could just mine the thieving transaction themselves? The hackers could operate a miner which privately adds that transaction every time it tries to solve a block, but broadcasts it only when they successfully got the block. It could be running for days before it succeeds, because there's probably no urgency. They can take all the fees, and it's difficult to frontrun because nobody knows the theft is happening until the block is already solved and it's almost too late.
- pcthrowaway 4y ago
  I mean it's not like they're risking a massive amount of ETH on the first try, but if they saw it get stolen the first time, sure, they might try sniping the token by running/bribing a miner if the payout was great enough (there are networks of miners that let you include transactions without getting front-run by paying them a fee)
- syzygyhack 4y ago
  You are correct. Actually in practice it is far less complicated to achieve this, at least for Ethereum. You can simply use the Flashbots RPC to bundle your transaction and have it sent straight to a miner. No exposure to the public mempool = no frontrunning possible, and no need to run your own miner/validator.

charcircuit 4y ago

>but they'd actually lose money What do you mean? The only outcome is that the company loses money due to giving it to miners.

FatalLogic 4y ago
You're right. As sibling comment says, in many cases, the attacker would attempt to pay the fee with funds from the address they were robbing. Though some token transfers might require the attacker to add their own funds. I was mistaken about that part.
- deleted 4y ago
  [deleted]

desdiv 4y ago

The point of this type of honeypots is to entice the blackhats to just take the crypto and walk away. Making it harder for them to walk away with the money would be counter-productive. Old situation: blackhats sticks around for weeks or even months, exfiltrate data, blackmail, install crypto miners, etc. With crypto honeypot: blackhats take the crypto and leaves. With rigged crypto honeypots that are actually not redeemable: >on the hacker forums: >Guy A: "I tried to take the bitcoins from Corp A's honeypot wallet, but they broadcasted a high fee transaction and beat me to it." >Guy B: "Funny, same thing happened to me last week with Corp B's wallet." >Guy A: "Guess it's back to the old blackmail method then."

FatalLogic 4y ago
Yes, all correct. But if you offer a CEO the option of a defense that is just as effective, but also steals part of the bait money back? If the potential long-term cost is only hurting the corporation's reputation with a shadowy hacking group, and reducing the effectiveness of the defensive technique for everyone? Bottom line: I think we can guess which option a CEO would usually choose Remember that this method works best when it's not obvious that it is a tripwire, and may be best of all when it acts as a bribe to a greedy individual within a group of hackers.
vmception 4y ago
I don't know, it seems like if the corporation sent a high fee transaction they have already been alerted that their defenses need to be raised. so your attack vector has limited efficacy as it might be closed. the hackers need to have the foresight to sit in the server and accumulate other blackmail, but also not lose the chance to take the bitcoin bounty based on another hacker finding it.

X6S1x6Okd1st 4y ago

For ETH currently you could just use flashbots for front running protection