🤖Mev Bot Protection

Isn't it great when your token/project starts seeing lots of volume from buyers in the DEX but then you see the dreaded front-running bots targetting your token? Such bots place sandwich attacks which take money out of your pocket. Although these bots do a lot of buys and sells, which shows up as a healthy volume on the chart, in reality, they are taking money from you.

EG SmartRouter will block these front-running bots saving you money. Isn't that amazing?

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Let's discuss this topic in more detail specifically looking at the issue of transaction ordering.

Blockchains today have 2 "problems".

Problem 1 is that Transactions are public.

So if you want to Buy 100 ETH of SHIB, this transaction goes to a Mempool. While it's in the mempool, it's visible to everyone. Including malicious actors.

Problem 2 is that Transaction ordering is centralised, even though it's operating in a decentralised blockchain system.

So let's say we have a series of transactions in the mempool.

T1, T2, T3 ...

At some point, they will be picked up by a validator whose job is to put it in a block.

A validator picking up transaction to put in a block

A validator gets to decide unilaterally how these transactions are ordered. It may have seen these transactions in order like we've seen here, but it's not obligated to retain that order. It can even insert its own transactions in the block.

It could for instance, if it chooses, change the order to look something like this.

Validator can change the order of transactions that go into the block

Why is it an issue?

This leads to a Front-Running or Sandwich attack which many bots exploit, especially on Uniswap.

How it works:

1. A New Buy order is put in just before your Buy Order.

2. Followed by your Buy Order so you purchase at a higher price.

3. A new Sell order is placed straight after your buy comes in, making the bot a nice little profit.

Let's see a real example of a token getting a lot of volume on Uniswap at the time of writing.

Sandwich attack in action

• The bot sees a New Buy come in for 5 ETH

• It places a new buy of 1.9 ETH before your BUY raising the price

• You now Buy at a price of $0.02558 instead of $0.02535

• The bot immediately sells after your Buy

• Drains 0.0133 ETH which at the current market price of ETH is $25

• So you lose out on $25

How bad is this problem? It's a 24/7 operation with multiple bots fighting against each other to secure the trade.

Let's see another example.

jaredfromsubway in actionis

In just a few hours, the famous jaredfromsubway MEV bot has placed 67 trades using 511 ETH pumping a total volume of 0.5 million on this token. The result is a nice profit of 0.7 ETH ($1400).

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What can we do about this?

Use a clever system like the one we are working on to build within the EG SmartRouter.

We will route your transaction in such a way that it won't be visible to the mempool or even etherscan until it is confirmed, making it invisible to the MEV bots.

So by using EG SmartRouter for your next purchase or asking your community to buy using EGSwap, you will:

1. Earn by profit sharing for the volume generated by your community.

2. EG SmartRouter finds the best prices for your trade.

3. A portion of your total supply is burnt

4. You get built-in MEV bot protection saving you money.