‘Unlucky' MEV bot takes out huge $12M loan just to make $20 in profit

Unlucky MEV Bot Loses $12 Million Loan in Failed Sandwich Attack

On September 5, blockchain analytics firm Arkham Intelligence reported an incident involving a Maximum Extractable Value (MEV) bot. The bot borrowed a staggering $11.97 million in Wrapped Ether (WETH) to execute a "sandwich attack" on a user attempting to trade Shuffle (SHFL) tokens worth approximately $5,000.

The MEV bot engaged in a series of 14 transactions, borrowing and lending funds in USDC and WETH through DeFi platforms Aave and Uniswap. However, after completing the attack and covering gas fees, the bot managed to profit by a mere $20.

Arkham Intelligence provided data indicating that the entire transaction occurred within a single block, with the bot executing all transactions within 12 seconds.

Mechanics of a Sandwich Attack

In a sandwich attack, an attacker intercepts a victim's transaction with two of their own transactions. The victim's transaction is placed in the mempool, where it awaits inclusion in a block. The attacker then submits a transaction with a high gas fee, ensuring it is processed first, and another with a lower gas fee, ensuring it is processed after the victim's transaction.

The attacker exploits this manipulation by purchasing the victim's asset at a below-market price and selling it within the same block, profiting from the price difference minus gas fees.

Previous Success of MEV Bots

Despite the failure of this particular MEV bot, such bots have historically been lucrative for their operators. For example, in April 2023, the notorious MEV bot operator "jaredfromsubway" netted over $1 million in a week through sandwich attacks on PEPE and WOJAK memecoin traders.