MEV bot earns $1M but loses everything to a hacker an hour later

MEV bot earns $1M but loses everything to a hacker an hour later

An Ethereum arbitrage tring bot managed to hit the jackpot and lose it all on the same day in an ironic turn of events in decentralized finance (DeFi). 

In a Twitter thre, Robert Miller, who works at the research firm Flashbots, shared how a Maximal Extractable Value (MEV) bot with the prefix 0xbc0de was able to earn 800 Ether (ETH), around $1 million, through arbitrage tres.

According to Miller, the bot took vantage of a huge arbitrage opportunity that came when a trer attempted to sell $1.8 million in cUSDC through the decentralized exchange (DEX) Uniswap v2 and only got $500 worth of assets in return. The bot detected this chance and immediately sprung to action and gained massive profits.

However, only an hour later, a hacker exploited a vulnerability in 0xbc0de’s “b code” and tricked it into authorizing a transaction that drained its balance of 1,101 ETH, which was around $1.41 million at the time of writing.

#MEV A very profitable MEV bot, internally named as 0xb, was somehow tricked/hacked with 1,101 ETH loss (~$1.45M) in the following tx:

— PeckShield Inc. (@peckshield) September 27, 2022

According to the blockchain security firm PeckShield, the bug can be traced back to the bot’s callback routine, and this was exploited by the hacker to approve an arbitrary dress for spending. 

Related: Pantera CEO bullish on DeFi, Web3 and NFTs as Token2049 gets underway

On Sept. 18, a vulnerability in Profanity, an Ethereum vanity dress generator, was exploited, draining $3.3 million in funds from various wallets. Investigations done by the decentralized exchange (DEX) aggregator 1inch Network highlighted that there was ambiguity in terms of the creation of the wallets. The DEX warned users that their wallets were at risk and urged them to transfer their assets.

More than a week later, another vanity wallet dress was exploited and drained of almost $1 million worth of ETH. After stealing the funds, the hackers immediately sent them to the controversial crypto mixer Torno Cash. 

ARTICLE: MEV bot earns $1M but loses everything to a hacker an hour later
PUBLISHED: 2022-09-28 09:57:41 
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