- Report links “jaredfromsubway.eth” to a sandwich bot that exploits traders on the Ethereum network.
- The sandwich attack led to an increase in the Ethereum gas fee from $1 to $10.
- The sandwich hacker has spent about $2 million to front-run punters of PEPE and CHAD.
There are several forms of attack in the cryptocurrency ecosystem. On our radar today is the sandwich attack on newly-issued coins— Pepe (PEPE) and Chad (CHAD).
It is intriguing that these two meme coins, which have no intrinsic value, became the target of sandwich bots deployed by hackers
How did the Sandwich Attack happen?
Sandwich attackers have mastered the art of identifying tokens with intrinsic value, low cap and likelihood to soar in the nearest future. Often, they front-run — take advantage of pre-market information in order to buy or sell crypto before it is implemented.
It was on this premise that an entity connected to “jaredfromsubway.eth” identified crypto traders betting and trading Pepe and Chad tokens.
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The price value of both PEPE and CHAD rose by about 10,000% in the last few weeks, making the traders a perfect bait for these hackers.
The hackers discovered these traders and trapped transactions between two wallets. Thereafter, they proceeded to manipulate the profit.
According to reports, the hackers created a sandwich chain using the wallet “Jaredfromsubway.eth. In this chain, they have spent more than $2 million on the Ethereum network fees.
The reason for spending that much in the past weeks was to discover and punt on predominantly low-cap tokens with intrinsic values. This automatically leads to a spike in gas fees while they set the trap for thousands of wallets.
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Interestingly, PEPE and CHAD traders did not notice the sandwich bots as an exploit; they proceeded with their transactions while the “Jaredfromsubway.eth” wallet was receiving a penny from each transaction
It became worrisome when each transaction on the Ethereum network, which previously cost $1, rose to about $10.” This probably prompted Dune Analytics to release its report on what could have led to such a hike in Ethereum.
The report pointed all fingers at the actions of Jaredfromsubway.eth. It showed that this sandwich attacker spent 7% of all fees on Ethereum in the past 24 hours— becoming the top spender on the network.
Ethereum Network Fees Surges
The immediate impact of the sandwich bot scam is that it led to an outrageous increase in the Ethereum gas fee. Analysis showed that the gas fee catapulted from $1 to $10 due to this sandwich scammers exploit.
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Another impact is that it exposes the vulnerability of the Ethereum network. Although some experts argue that sandwich bots are not necessarily an exploit, the act confirms that transactions on the Ethereum network can be compromised. More so, it shows that several activities can lead to an increase in the gas fee without the network or users suspecting it.
On a positive note– amidst the surge in gas fees — Ethereum layer 2 networks have seen increased usage. Within the first quarter of 2023, over 635,000 Ethereum users have bridged crypto assets to Ethereum Layer 2 networks such as Optimism, Arbitrum and Polygon.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.