An MEV bot operator earned massive profits worth $1 million by seizing an arbitrage opportunity,however, it was tricked into authorizing a malicious transaction that resulted in a 1,100 ETH loss within an house .
MEV bot, or Maximal Extractable Value bot , is an automated software technique used by validators and bot crypto operators to capture excess value from the slippage or spread enabled by on-chain transactions on decentralized blockchains.
In a Twitter thread, Robert Miller, who works at the research firm Flashbots, shared how a Maximal Extractable Value (MEV) bot with the prefix 0xbadc0de was able to earn 800 Ether (ETH), around $1 million, through arbitrage trades.
According to Miller, the bot took advantage of a huge arbitrage opportunity that came when a trader attempted to sell $1.8 million in cUSDC through the decentralized exchange (DEX) Uniswap v2 and only got $500 worth of assets in return. The bot detected this chance and immediately sprung to action and gained massive profits.
Also Read: Crypto Attacks in Nigeria And Ethiopia Happens Through Variant Of Phorpiex Botnet: Research Shows.
However, only an hour later, a hacker exploited a vulnerability in 0xbadc0de’s “bad code” and tricked it into authorizing a transaction that drained its balance of 1,101 ETH, which was around $1.41 million at the time of writing.
According to the blockchain security firm PeckShield, the bug can be traced back to the bot’s callback routine, and this was exploited by the hacker to approve an arbitrary address for spending.
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