A MEV bot run by a certain jaredfromsubway MEV-bot over the last 24 hours spent $1.33m in gas on the Ethereum network to carry out \”sandwich attacks\” when interacting with low-liquidity meme tokens Pepe, Wojak and Chad on DEX such as Uniswap.
The address accounted for 1.75% of all gas spent in the network. By this metric, it ranked second among the largest gas consumers in the Ethereum network.
According to Watchers.ETH, on April 19 the bot’s profit was about $700,000.
One of the mentioned assets — Pepe (PEPE) — launched on April 14. In recent days the meme token has risen more than sevenfold.
Despite the strong momentum and price surge, traders cannot cash out their assets. In ImmuneFi’s CTO Adrian Hetman’s view, the problem with meme tokens lies not only in the lack of buyers, but also in that their liquidity is typically concentrated in AMM pools, which prevents large trades.
For this reason, operations with such assets lead to significant slippage, making them ideal targets for MEV-bot sandwich attacks.
The typical algorithm works as follows: the bot finds a large buy order in the mempool, places its own order in front of it to acquire tokens at a lower price using front-running. The large order is executed, moving the price up. Then, using back-running, the coins are sold for a profit ahead of other users.
According to EigenPhi, in the past week PEPE and WOJAK became the most popular assets on the Ethereum network after WETH, USDC and USDT, with transaction volumes of more than $250m and $120m respectively.
The bot controlled by jaredfromsubway.eth earned about $1.5m in PEPE pairs, and about $2.81m in WOJAK pairs.
According to EigenPhi, the hot Memecoins PEPE and WOJAK have become the most popular trading objects on the Ethereum after WETH, USDC and USDT in the past week, with more than 250 million and 120 million US dollars in transaction volume. The MEV robot controlled by…
— Wu Blockchain (@WuBlockchain) April 20, 2023
Activity of the MEV bot and the meme-token hype has driven up gas costs. If on April 15 the average was 25 gwei (about $1.10), by April 19 it had risen to 72 gwei (about $2.92), with a maximum of 240 gwei (about $9.74).
In April, Bloomberg Intelligence strategist Mike McGlone expressed concern about meme tokens Dogecoin and Shiba Inu, calling them \”naturally speculative assets\”.