If you took a look at the top users of gas on Etherscan over the last week, you’d see one morbidly obese metric: the second biggest consumer of gas, sandwiched between Arbitrum and Optimism, and spending more than 90 ETH (around $180,000 USD) in the last 7 days is an 0x address, JaredFromSubway.eth.
This evil sandwich attacker is using a MEV bot to programmatically win instant arbitrage trades on Ethereum. He's the reason gas fees have gone bananas.
So, What’s a MEV Bot ?
While using one won’t likely send you to federal prison for lascivious acts, it’s a pretty-shitty strategy for turning a dime. The concept of MEV has its roots in Bitcoin mining, where it stood for “Miner Extractable Value.” In practice, it was used to analyze transactions and stack them in an order that would return the most value for miners. For example, if a miner observed two transactions that are both competing to be included in the same block, they could choose to process the higher paying transaction first, forcing the lower-paying transaction to pay more, extracting more value from the second transaction, even if it arrived at the mempool first.
In the Proof of Stake world, it’s now termed “Maximum Extractable Value” and validation is based on staked collateral; so MEV Bots are designed to manipulate other parameters, such as validator selection, transaction inclusion and network fees. There are a couple different types of tactics used by exploitive actors to extract value in this situation, with one being labeled a… Sandwich Attack.
Now we know where JaredFromSubway.eth got his name.
What’s a Sandwich Attack?
Here’s an example of how Jared’s AI Mev Bot might work:
It monitors pending transactions on the blockchain and identifies a target transaction, such as a large buy or sell order.
By copying the nonce of the target transaction, which can be determined by the account’s history viewable on the blockchain, it submits a cancel transaction for the same order.
Because it is newer, the cancel transaction with the same nonce is processed ahead of the pending target transaction.
The bot then submits a new transaction with a higher gas fee than the target transaction, which is processed first because it is more profitable, effectively front-running the target transaction.
The target transaction then executes after the bot’s transaction and the bot profits from the difference between the two.
Since Jared’s bot appears to be using one exchange exclusively for these exploits, it’s reasonable to suggest that the DEX has not employed anti-front-running measures to combat sandwich attacks, allowing for this sort of activity to occur.
Does it Cut the Mustard?
There’s a lot of debate in the Ethereum community over whether or not MEV Bots are a good or bad thing. On one hand, proponents argue that they are a normal consequence of the open and permissionless state of the blockchain, much like other arbitrage trading strategies. It’s also argued that they can improve efficiency and level the playing field for smaller participants.
The other side argues that it’s completely unfair and gives an edge to sophisticated traders who are more technical and have more resources. Beyond the equity/fairness argument, many contend that MEV bots compromise the security and stability of Ethereum and can lead to unexpected outcomes, such as cascading liquidations and flash crashes. And, of course, higher transaction fees.
Regardless of which condiment you prefer, this is obviously a shit sandwich for the original trader who just paid more for their alt coin than they should have. And for the rest of us, Jared is slipping an unwanted salami into everyone’s bottomline by clogging the network and raising gas fees. That Gazette #136 you were going to mint for $25, now costs you $50, cuz gas.
One thing is certain, the ENS of this bot is perfect: JaredFromSubway.eth is predatory, opportunistic and exploitative, just like its creator intended it to be. And just like the irl sandwich-shilling namesake who’s locked-up for 15 years, we can only hope that this web3 block molester gets served some form of justice and soon.
Enjoy your lunch! 🥪