So this one is interesting! A bot has been backrunning new token listings, effectively paying premium to miners to buy newly listed tokens before anyone else can
And a new token fought back yesterday, trapping the bot for $200k while benefiting from their buy. Here's how 👇🏻
And a new token fought back yesterday, trapping the bot for $200k while benefiting from their buy. Here's how 👇🏻
https://twitter.com/HighGwei/status/1380528483475030017
For weeks this bot has been monitoring the Ethereum mempool for new pairs being created on Uniswap. If it finds one it the bot places a buy transaction immediately behind the initial liquidity. That way they can buy a new token before anyone else. 
They've been paying miners huge amounts for the right to do this! You can see here a few of the top Flashbots bundles of all time are from this bot. In total they've paid 340 ETH to miners.
Side note: this is from a dashboard Flashbots is making public soon.
Side note: this is from a dashboard Flashbots is making public soon.
Doing this has been very profitable for this bot. Their initial buys of $100k - $200k will immediately pump the price and then they'll slowly dump at a multiple higher than they bought.
A community member watched and found they made $2m from one of these.
A community member watched and found they made $2m from one of these.
But this forest isn't so dark. These are high profile transactions & the DeFi community is smart.
Someone laid a trap for this bot: they would deploy a new token that would freeze your tokens if a large amount are bought within 3 blocks of the liquidity being added.
Someone laid a trap for this bot: they would deploy a new token that would freeze your tokens if a large amount are bought within 3 blocks of the liquidity being added.
Funnily enough this is literally called "LiquidityTrap.sol" and is publicly viewable for anyone on Etherscan
etherscan.io/address/0x491e…
etherscan.io/address/0x491e…
And upon launching their Uniswap pool the aforementioned bot fell for it!
They bought 100 ETH worth of the token - "Kattana" - immediately after listing, thus falling into the liquidity trap. And they paid 68 ETH to the miner too!
They bought 100 ETH worth of the token - "Kattana" - immediately after listing, thus falling into the liquidity trap. And they paid 68 ETH to the miner too!
It appears to have worked! Whereas the bot would start dumping other tokens a few blocks in you can see the Kattana is still sitting there untouched.
With 67,000+ tokens and a current price of $24 a token these are worth a cool ~6X what they were bought for (obviously less with slippage).
As far as I can tell the only thing the bot can do now is to send all the Kattana to the owner of the contract or sit on it forever.
The nice thing for Kattana is that they got all the benefits of this bot (token immediately pumping!) without the drawbacks (dumping on retail)
The nice thing for Kattana is that they got all the benefits of this bot (token immediately pumping!) without the drawbacks (dumping on retail)
It's not clear to me whether this was a targeted trap for this particular bot but with a quick glance Kattana seems to be a real project. No idea what it is though.
https://twitter.com/kattanatrade/status/1380531614980145156
Also who knows whether this bot is deterred or not! Ultimately they probably have made many many times more than they lost from Katanna.
And a little after they were caught in a trap they were at it again, this time StonkSwap.
And a little after they were caught in a trap they were at it again, this time StonkSwap.
That's the end of this story folks. It's fascinating to watch bots try to exploit other bots (e.g. Salmonella) and projects updating their mechanisms in response to bots like this one.
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