How a Bot Gained and Lost Over $1 Million of ETH in One Night

On Tuesday night, an Ethereum MEV bot gained 800 ETH through the use of clever arbitrage, only to lose all of it and more to a hacker an hour later.

Here’s how the situation played out on-chain:

The event began with a third-party trader mistakenly losing nearly $2 million to spreads on Uniswap v2 trade. While he initially traded in 1.8 million cUSDC, he only received 518 USDC in return. 
According to Flashbots Product Lead Robert Miller, this only created a “massive arbitrage opportunity” for another trader to swoop in and claim plenty of ETH.
“0xbaDc0dE [the MEV bot] dutifully backran the arb in the mempool (!) in a looong arb touching many protocols,” he explained. In the end, the bot netted 800 ETH. 
However, that ETH was entirely stolen just an hour later. Miller claims the bot didn’t properly protect the function it’s used to execute dydx flashloans, leaving it vulnerable.

“When you get a flashloan the protocol you’re borrowing from will call a standardized function on your contract,” he said. “0xbaDc0dE’s code unfortunately allowed for arbitrary execution.”

Using this vulnerability, an attacker approved all of the bot’s WETH for spending on the contract, then transferred it to his own address. That was 1,106 WETH in total, worth over $1.4 million at writing time. 
Numerous vanity addresses generated by Profanity have also been drained of roughly $1 million in ETH this month. 

The post How a Bot Gained and Lost Over $1 Million of ETH in One Night appeared first on CryptoPotato.

Related Posts

BlackRock CEO: FTX caused its downfall, but Bitcoin is still revolutionary for the evolution of financial markets

The BlackRock CEO still sees crypto assets as revolutionary, even though he disagrees with the issuance of tokens by centralized exchanges. The CEO of the asset management…

IOTA: Holders of $SOON can stake their tokens, get massive discounts and more – Report

Soonaverse brings a staking feature for its $SOON tokens with 2x rewards points for disciplined stakers. It will also bring a greater level of decentralization to how…

Turning Garbage Into Digital Gold: The Rise Of Landfill Bitcoin Mining

Powering bitcoin mining operations with landfill waste is the latest trend in sector growth as miners capitalize on wasted and stranded energy resources. Powering bitcoin mining machines…

Blur Airdrop 2 Is Scheduled For Monday: Is Free Money Season Back?

NFT marketplace, Blur is back with a second airdrop for its users. In a tweet on Wednesday, November 30, Blur announced that its airdrop 2 would arrive…

Russian Billionaire and Crypto Businessman Dies in Helicopter Crash in France

Russian financier and cryptocurrency entrepreneur Vyacheslav Taran has been killed in a helicopter crash on French territory. The accident marks the latest in a series of deaths…

Binance Plays Chess With Troubled Crypto Firms Struck by FTX Contagion

Binance continues with auditing and acquisitions following the collapse of rival exchange FTX, the contagion from which continues to spread. With the collapse of FTX, other crypto…

Generated by Feedzy