Even in a bearish mood, the DeFi market still has been welcoming new yield farming protocols every day. With new protocols come new capitals; with new capitals derive new volatility.
The following chart illustrates the last 7 days’ arbitrage performance expressed in trading profit.
To everyday traders, the profit of arbitrages is not as substantial as trading volumes because we care less about how much money searchers made than how much money they targeted.
Moreover, when you split the last 7 days’ trading volume by type, the following chart unveils the unknown danger we face during each and every token swap.
The danger is in the purple part of the chart: Sandwich arbitrage, the most cloaked, shady, and damaging MEV thing in the DeFi world. And they are effectively out of the public eye without constant monitoring and exposure.
According to the volume chart, Sandwich arbitrage has taken up the majority of Ethereum arbitrages, which means it’s highly likely that your token swap is in the scope of sandwich searchers without any protection.
In this article, we will examine what Sandwich arbitrage is, how it impacts the market, and how to be equipped to protect yourself.
Since the beginning, EigenPhi has been devoting itself to building a healthier and more robust DeFi ecosystem. In EigenPhi Classroom, you can read our explanation of the mechanism of Sandwich arbitrage. We also showed you our approach to identifying a Sandwich arbitrage.
Moreover, we released the Sandwich module, providing a systematic analysis of Sandwich arbitrage. Here are the features of this module.
We also used the data to generate the Sandwich arbitrage Daily Report to give you an overview of the attack and its specifics on a day-to-day basis. Please read this article to find out the daily impact of Sandwich arbitrage on the market.
If you have been a crypto player for a while, you might be interested in finding out if you have been attacked. We released this little kit to help you check.
Put your wallet address in the search box, and you will be able to find out.
Whether or not you are a victim, it’s critical to use protection, like wrapping up your deal. Luckily, the open-source project Flash Bots provides a “Flashbots Protect” tool to protect your transaction from Sandwich arbitrage. All you need to do is some simple Metamask configuration. Please read their quick start for details.
To conclude, if you want to share with your friends about the Sandwich attack, here are the things you could recommend.
If there is more information you’d like to find out about Sandwich arbitrage, please leave your comment. You can also contact us via the channel below.
Stay Away From Sandwich Arbitrage and Stay Safe!
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