Frontrunners arbitrage bots exploit pending Ethereum transactions, report warns

frontrunners arbitrage bots

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New reports making the rounds have shown that pending Ethereum transactions stand a very high risk of frontrunners arbitrage bots exploitation.

In the full report, it was noted that pending transactions on the blockchain were always at a risk of getting tampered with by frontrunners arbitrage bots. 

According to a research partner at Paradigm, Dan Robinson, who was the writer, things could get messy as the frontrunners monitor the mempool of Ethereum or transactions on the Ethereum blockchain that have not been confirmed. 

Furthermore, the report stated that once the bot sees a vulnerable transaction, it tries to switch the receiving address.

Bots exploit transactions with lapses

Robinson states that frontrunners arbitrage bots exploitation occurs when the bots start to search for transactions that have some key lapses. The most vulnerable transactions are transactions carried out on decentralized exchanges and Oracle according to him.

Going further, he warned that the bots are capable of doing more than that as they can carry out specific transactions and make copies of internal transactions that are generated by execution trace. In simpler terms, he said if the first transaction can be exploited, then the others stand a high risk of getting exploited.

Experiment to thwart frontrunners arbitrage bots failed

Robinson said to get rid of the frontrunners arbitrage bots exploitation, he hid specific transactions. After he hid the transactions, he made a bait transaction to see if the bot would exploit it after he got help from a team of engineers well versed in smart contracts. 

Furthermore, he noted that the plan failed woefully as the bots still tried to exploit the transactions. He also mentioned that even though the problems are with bots today, miners might take full advantage of the whole situation and direct funds to their wallets.

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Kamsi King

King Kamsi is a fintech and digital currency writer and enthusiast. He is keenly interested in blockchain and cryptocurrency and their global adoption. When not busy with writing, he can be found hobnobbing in forums with the best minds in crypto, both developers and startup founders.

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