You can check the website statistics yourself or request them from us at [email protected]
On this platform, only organic high-quality traffic
Bitcoin
$ 30,725

Uniswap V3 User’s Costly Liquidity Pool Error: $700,000 Lost to MEV Bot

A trader who utilized the decentralized exchange (DEX) Uniswap V3 experienced a significant loss of over $700,000 due to inputting incorrect values when creating a new liquidity pool.

As reported in a post by on-chain analytics firm Arkham, the user provided a total of $1.5 million in liquidity to the WBTC-CRV pool on Uniswap V3, but did so at a price significantly higher than the prevailing market rate at that time.

Within a mere 12 seconds, Maximal Extractable Value (MEV) bots took advantage of this pricing discrepancy, swiftly exchanging CRV tokens for WBTC tokens, which were considerably more valuable. In this context, CRV represents the governance token of the Curve decentralized finance (DeFi) protocol, while WBTC (Wrapped Bitcoin) is an ERC-20 token that mirrors Bitcoin on the Ethereum blockchain.

Only $260 in profit

Curiously, the MEV bot that profited the most from arbitraging the pricing error only managed to make approximately $260. This, however, came at the cost of paying around $527,000 worth of Ether as a form of bribe to validators in order to gain an advantage over other competing bots.

The incident is likely attributed to what’s commonly referred to as a “fat finger” error, typically occurring when entering a trade, or in this case, while establishing a new liquidity pool.

A plausible explanation that has surfaced suggests that the user may have confused the CRV token with USD when adding $1.56 million worth of WBTC to the pool. In return, the user received 1.56 million CRV tokens, which, in terms of US dollars, currently hold a value of only approximately $900,000.

What are MEV bots?

Maximal Extractable Value (MEV) bots, previously lesser-known, have recently gained significance within the DeFi ecosystem on the Ethereum network.

These bots are engineered to swiftly recognize and capitalize on profit opportunities within decentralized exchanges, yet they have also been linked to what some consider to be scams and ethically questionable tactics. Occasionally, they are referred to as Miner Extractable Value, and their profitability is achieved by persuading miners or network validators to reorder or censor certain transactions within blockchain blocks.

Related Posts

Leave a Reply

Confirm now and stay with our news

What we write about

I want to save money. Will cryptocurrency work?

Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

Every cryptocurrency has two main components: the units of digital exchange called “coins” and the network within which the exchange takes place. These units can be transferred between wallets and exchanged on exchanges. The networks in which these coins exist are called blockchains, which translates to “chains of blocks.”

Latest Articles

Winklevoss Twins Invest $4.5M in Crypto Podcaster Peter McCormack’s Football Club
15.04.2024By
Investor Caution Persists as Digital Asset Investment Products See $126M in Outflows
15.04.2024By
Bitcoin Shows Resilience Compared to Broader Crypto Market Despite Sell-Off: Fineqia
15.04.2024By

Latest news

Winklevoss Twins Invest $4.5M in Crypto Podcaster Peter McCormack’s Football Club
15.04.2024
Investor Caution Persists as Digital Asset Investment Products See $126M in Outflows
15.04.2024
Bitcoin Shows Resilience Compared to Broader Crypto Market Despite Sell-Off: Fineqia
15.04.2024
DeFi-Focused Berachain Raises $100M in Funding Round Led by Brevan Howard Digital
15.04.2024
Hong Kong SFC Approves Spot Bitcoin and Ethereum ETFs as Market Rebounds
15.04.2024
Uniswap Labs Implements Fee Increase to 0.25% on Mainnet and Layer 2 Swaps
14.04.2024
Crypto Lawyer John Deaton Is Outraising Elizabeth Warren In Election Campaign
13.04.2024
Concerns Raised Over China’s Influence on US Bitcoin Mining Infrastructure
13.04.2024
VeChain Teams Up with UFC to Tokenize Fighter Gloves, Community Reacts
13.04.2024
Australian Crypto Mining Companies Collapse into Liquidation Owing 450 Investors
13.04.2024