MEV Robot Nets $1.73 Million in a Single Trade
According to Cointelegraph, a Solana-based MEV robot successfully earned approximately $1.7 million from a problematic trade, in which a trader took on significant slippage to purchase $9 million worth of meme coin Dogwifhat (WIF).
MEV robots are automated programs used to scan blockchain networks, identify profitable trading opportunities, and execute these orders automatically. According to data from Solscan, the MEV robot operated by 2fast exchanged 703 SOL tokens for 490,000 WIF tokens, and then swapped the same amount of WIF tokens for 19,035 SOL tokens within the same transaction bundle, resulting in a net profit of $1.73 million.
The MEV robot utilized a tool developed by Jito Labs, the development arm of the Solana liquidity protocol Jito. This tool operates similarly to the MEV infrastructure project Flashbots on the Ethereum network, allowing robots to search for maximum extractable value and bid to include transactions in bundles.
How did the arbitrage trade occur?
This sudden arbitrage opportunity arose after a trader named “zeroxtrading.sol” executed a trade, purchasing meme coins worth up to $8.9 million. Due to the low liquidity of the trading pool, this large order was executed at a price of approximately $3 per WIF token, a 1,400% premium over the token’s value at that time. Immediately after the trade was completed, the price of WIF plummeted, resulting in an instant loss of 92% of the trader’s funds.
Pland, an anonymous developer, stated on X platform on Thursday (11th) that the MEV robot used a relatively simple “backrunning” strategy to arbitrage from the trader who executed the WIF order in the “least efficient manner.” Backrunning is considered less harmful to the blockchain network as it only captures arbitrage opportunities generated by significantly mispriced trades without affecting the original trade. It contrasts with the more malicious “sandwich attacks,” which involve inserting an order between two transactions, resulting in the repricing of the initial bid and often causing losses for blockchain users.
Related reports: “The Next LSD-Level Opportunity? In-Depth Analysis of MEV Race and Outlook,” “Report Claims MEV Robot Jaredfromsubway.eth Earned a Whopping $34 Million in Three Months! Peers Question: Not That Much!” “Understanding Maximum Extractable Value and Incentive Reformation: How Flashbots Mitigate ‘Price Bidding’ Wars?”
