Ethereum robot makes millions from sandwich attacks

An Ethereum bot has caught the community’s attention after conducting numerous sandwich attacks against network users, earning millions of dollars from its fraudulent action.

Usually their action is aimed at attacking users on decentralized exchanges. This is because the technique used by the robot consists of intercepting user transactions and selling coins at a higher price.

Known as a sandwich attack, the action of the “JaredFromSubway.eth” address has already raised several concerns among Ethereum users. According to the research of live coinsthe creator of the contract keeps an average of 500 thousand dollars at the address to carry out the operations against his victims.

Ethereum bot makes millions of dollars profit from sandwich attacks

At the beginning of May 2023, the robot “jaredfromsubway.eth” had already benefited at least $6 million, according to a study by EigenPhi. To make the profit, he intercepted $40 million in victim trades and paid $34 million in Ethereum fees to get his trades confirmed first.

Company data shows that the address is one of the best-known robots of 2023, but not the only one to benefit from fraud.

This is because, in the past 24 hours alone, some sandwich attacks have generated profits of up to 18,000% for their creators, demonstrating that the practice continues to run at full speed, primarily with the Uniswap brokerage.

In April 2023, the address “jaredfromsubway.eth” spent $885,000 in Ethereum fees in a single day, profiting more than $2.7 million from its attacks on memecoins like Pepe, for example.

Understand how a “sandwich attack” works

The term “sandwich attack” refers to a strategy used in some types of decentralized finance (DeFi) transactions in the Ethereum ecosystem. This type of attack typically occurs at times when underlying asset prices are highly volatile.

Suppose a trader wants to execute a transaction on a DeFi protocol where, for example, one asset is exchanged for another. The trader can set a limit price on this trade, hoping that the asset price moves in a favorable direction.

However, an attacker can monitor ongoing transactions on the protocol and notice when a large order is about to be executed. The attacker then takes two actions.

First, the attacker executes a transaction that affects the price of the underlying asset. Then, the attacker can make a large purchase or sale of a particular cryptocurrency on a centralized exchange, temporarily affecting its price.

After that, the attacker sends a transaction to the DeFi protocol with a price that takes advantage of the temporary price change caused by the first transaction. The attacker’s goal is to execute the transaction before the merchant’s original transaction is confirmed, taking advantage of the price difference.

In this way, the attacker manages to make a profit within seconds at the expense of the original trader. Profit arises from buying or selling the asset at the advantageous price before the price returns to normal due to the trader’s original trade.

This type of attack becomes possible because transactions in DeFi protocols take place in a succession of blocks and the price of an asset can change significantly between blocks. In addition, since the Ethereum ecosystem is public and transparent, attackers can monitor ongoing transactions and plan their attacks.

With the use of robots such as “JaredFromSubway.eth”, transactions take place much faster and cause more damage. Some ethereum protocols are trying to end the fraudulent use of robots, arguing that sandwich attacks harm the ecosystem.

It is worth remembering that in the US “Jared From Subway” is a famous case of pedophile Jared Fogle, arrested and convicted by the authorities in 2015. He had become famous in previous years and claimed to have lost 100 kilograms by eating Subway daily.