Ethereum Frenzy: Sandwich Bots Capitalize On Crypto Gold Rush

Apr. 19, 2023
Ethereum Frenzy: Sandwich Bots Capitalize On Crypto Gold Rush

In the cryptocurrency world, trend-chasers often profit from digital asset crazes. Notably, sandwich bots have become significant players. They exploit meme-inspired tokens like Pepe (PEPE) and Chad (CHAD).

These tokens have no inherent value. Nevertheless, they surged by over 10,000% almost overnight. As a result, they captivated Crypto Twitter. A sandwich attack involves trapping a user’s transaction between two other transactions, allowing the attacker to profit by frontrunning the victim’s trade.

The attacker buys the same asset and sells it to the victim in the same trade for a slightly higher price. Although not considered an exploit, this predatory behavior takes value from users, increases gas fees, and provides no benefits to the network or the user.

Victims may not realize they are being attacked by sandwich bots. These bots can accumulate millions of dollars in profit. They do this by targeting thousands of wallets and skimming small amounts each time.

One notable wallet is “Jaredfromsubway.eth.” It is possibly named after a popular sandwich chain. Reportedly, it has spent over $2 million on Ethereum network fees in the past week. Its main focus has been sandwiching traders, primarily targeting low-cap tokens.

Skyrocketing Ethereum Network Fees

According to data from Dune Analytics, this activity has caused a significant increase in Ethereum network fees. Each transaction on the Ethereum network now costs over $10, a tenfold increase from last week’s $1 rate.

Gas fees spiked dune
Source: Dune

Firstly, Jaredfromsubway.eth has been responsible for 7% of all fees on Ethereum. This happened in the past 24 hours. Consequently, it became the top spender on the network. In comparison, Arbitrum is a layer 2 blockchain.

However, it was surpassed by Jaredfromsubway.eth. Similarly, Uniswap is the most popular decentralized exchange. Yet, it also fell behind Jaredfromsubway.eth.

Although the exact profit made by Jaredfromsubway.eth from these frontrunning activities remains uncertain, the substantial amount spent suggests returns that likely far exceed the costs.

However, research firm Sealaunch estimates that Jaredfromsubway.eth has gained over $1.4 million since Tuesday. This estimation was tweeted recently.

The Rise of Meme-Inspired Tokens

Meanwhile, the frenzy around Pepe tokens persists. In fact, their value nearly doubled in just the last 24 hours. Recently, Crypto Twitter traders changed their focus. Previously, they concentrated on doge-themed tokens. Now, they are betting on internet meme-inspired Pepe tokens.

The market has also seen the emergence of various imitations, including Chad, wojak, and babypepe, all inspired by popular internet memes. As Ethereum network fees rise due to sandwich attacks, it is crucial for users to be aware of potential vulnerabilities.

Related Reading | Ethereum Layer 2 Bridging Skyrockets In Q1 2023: Report

Additionally, the community must work on solutions. In doing so, they can discourage predatory behavior. Ultimately, this will positively impact the broader ecosystem.

Kashif is a crypto-journalist with over 4 years of experience in the Cryptoverse. He began his career as a software engineer, but his curiosity towards decentralized technology lured him into the labyrinth of crypto, where he discovered a passion for reporting the latest news and developments in the field.