@ercandotbtc
🔍 Understanding Sandwich Attacks in DeFi
Ever wondered how attackers exploit transactions in decentralized exchanges? Let’s break down the Sandwich Attack:
🚨 How It Works:
1️⃣ A victim submits a BUY transaction to the mempool.
2️⃣ An attacker detects this and submits two transactions:
BUY with a higher gas fee (to front-run the victim).
SELL with a lower gas fee (to back-run the victim).
3️⃣ The block producer orders these transactions based on gas fees.
4️⃣ The attacker’s BUY increases the token price. The victim’s BUY executes at a higher price near the slippage limit.
5️⃣ The attacker’s SELL finalizes, profiting from the price increase caused by the victim's transaction.
💡 Result: The victim pays more, while the attacker profits.
What are your thoughts on combating sandwich attacks?