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prior to MEV-relay arbitrage bots and generalized frontrunners did this in the public mempool via the gas auction... MEV-relay allows them to instead submit bun
by beaugunderson 2y ago
prior to MEV-relay arbitrage bots and generalized frontrunners did this in the public mempool via the gas auction... MEV-relay allows them to instead submit bundles of transactions ordered in the way that makes them the maximum amount of
profit by offering bribes to validators to include those bundles. those bundles cost money for other network participants, because you can take a swap transaction from the public mempool and include it in a bundle where you swap before and after that transaction and profit from the slippage. this is done decreed by law but because it appeals to the financial self-interest of the searchers and validators involved. the submitted bundles are supposed to be secret--the defendants in this case figured out how to force the validators to leak the proposed blocks by signing them with an invalid header. they could then submit their own bundle that cost the original submitter money by frontrunning their attempted frontrunning.
you used to be able to trick sandwich bots without having to rely on this level of hack, see for example:
https://www.coindesk.com/tech/2021/03/22/bad-sandwich-defi-trader-poisons-front-running-miners-for-250k-profit/ https://www.coindesk.com/tech/2021/03/22/bad-sandwich-defi-t...
so of course (smart) sandwich bot authors immediately started writing checks for poison tokens.
i'm honestly shocked that they're being prosecuted for this since it's a slight escalation on behavior that has evolved many times in ethereum's past.