A Solana-based maximum extractable value (MEV) bot has made a staggering $1.7 million from a single trade. This occurred when a trader made a $9 million purchase of the memecoin Dogwifhat (WIF) in a highly inefficient manner. The MEV bot, operated by 2fast, swapped 703 Solana SOL to 490,000 WIF and then swapped the same amount of WIF into 19,035 SOL within the same transaction bundle, netting a profit of $1.73 million.
MEV bots are automated programs that scan blockchain networks for profitable trading opportunities and execute those orders automatically. This particular bot used a tool developed by Jito Labs, the development arm of Solana liquid staking protocol Jito. This tool, similar to flashbots on the Ethereum network, allows bots to search for maximum extractable value and place bids for inclusion in the transaction bundle.
The lucrative arbitrage play was made possible by a trade executed by a single trader, zeroxtrading.sol, who purchased $8.9 million of the memecoin in a single order. This large bid was made in a low-liquidity pool, causing the order to be filled at roughly $3 per WIF token, about 1,400% more than the token’s worth at the time. The immediate drop following the transaction saw the trader lose 92% of their funds instantly.
In a post dated Jan. 11, a developer known as Pland explained that the MEV bot used a relatively simple backrunning strategy to capture the gain from the trader who executed the WIF order inefficiently. Backrunning is considered less harmful to a blockchain network as it only captures the arbitrage opportunity presented by a large mispriced trade and doesn’t impact the initial trade. This is in contrast to “sandwich” attacks, which involve sandwiching an order between two transactions to cause the initial bid to be repriced, often impacting the price of the initial trade and leaving blockchain users at a loss.
The single transaction caused the price of WIF to briefly spike as high as $4. Despite the trader being deeply out of pocket for their misplaced order, the giant candle inspired degens to begin buying WIF again, with the memecoin posting a 50% gain from the point immediately after the drop.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | None |
| Companies | MakerDAO, Jito Labs, Solscan, Solana, 2fast |
| Currencies | dogwifhat, Solana |
| Securities | None |
