blockchainreporter.net
In a significant development in the sector of MEV bots, an exclusive transfer witnessed a massive yield from only $100. A popular blockchain analytics firm Arkham disclosed that a bot going by “0x12F” conducted a timely trade through Uniswap, resulting in the exploitation of an illiquid pool for a huge yield in COMBO tokens.
This bot just turned $100 into $37K INSTANTLY
— Arkham (@ArkhamIntel) September 6, 2024
MEV Bot 0x12F purchased $37K of COMBO tokens with only 0.05 ETH.
It could do this because one unlucky user had just sold $37K of COMBO into an illiquid Uniswap pool – and received only $27 in return.
The bot paid $30K to a block… pic.twitter.com/l8yozgmVI9
An Unfortunate User Sells $37,000 in COMBO Tokens, Resulting in a Disastrous Loss
The opportunity emerged when an unfortunate consumer sold COMBO tokens of up to $37,000 worth. The respective user sold those assets into an illiquid pool on Uniswap. Because the pool had a liquidity deficiency, the consumer just received $27, denoting a catastrophic loss. As a result of this imbalance, the pool immediately developed a price inefficiency. Following that, the above-mentioned bot took advantage of the respective price inefficiency.
As Arkham revealed, the bot 0x12F recognized the price discrepancy. Hence, the bot bought COMBO tokens of $37,000 worth with just 0.05 $ETH, accounting for $100. This rapid profit resulted from the bot’s capability to swiftly identify and exploit such an arbitrage opportunity within the DEXs. The bot was not the sole one to perform this activity. It provided a block builder $30,000.
An MEV Bot Exploits a Uniswap-Based Illiquid Pool to Make $37,000 from Only $100
This guaranteed that the transaction thereof had a place in the blockchain before any reaction from others. Block builders operate as the MEV ecosystem of Ethereum with a specialty in managing transfers within a block, offering maximum profit to the MEV participants. The payment of the $30K fee guaranteed that the bot could complete the transfer before the rest of the bots or traders could interfere.
The respective event points toward the MEV ecosystem’s potential and risks. Although MEV bots such as “0x12F” can rapidly leverage the opportunities, the activity thereof often harms regular consumers. These users can potentially lose large amounts of funds when dealing with illiquid pools for trading.