Ethereum Foundation faced a sandwich attack during its recent sale of 1,700 ETH on Uniswap V3. The foundation, which is a key player in the Ethereum ecosystem, was caught off guard, resulting in a loss of U.S. $9,101.
According to data from EigenPhi, the Ethereum Foundation's transaction was targeted by an MEV Bot (0x00...6B40). This bot, capitalizing on the opportunity, managed to make a neat profit of U.S. $4,060 after covering its costs.
The foundation's sale took place at 16:18 UTC+8, where they exchanged 1.7K ETH for a hefty 2.738 million USDC. A peek into the foundation's wallet reveals a balance of 240.68 ETH, 3.238 million USDC, 49,700 DAI and 10,000 ARB, bringing their total assets to a cool $3.687 million.
But what exactly is a sandwich attack? For the uninitiated, a sandwich attack is a form of front-running tactic used in the world of decentralized exchanges. In this strategy, a malicious actor spots a pending transaction on the Ethereum network and quickly places their own transaction with a higher gas fee, ensuring it gets processed first.
They then place another transaction right after the target transaction, effectively "sandwiching" the original transaction. This allows the attacker to manipulate the price in a way that they can profit from the victim's trade.
The fact that the Ethereum Foundation, a central entity in the Ethereum space, fell victim to such an attack raises eyebrows. It brings forth questions about the security measures in place and the vulnerabilities that exist even for seasoned players in the crypto arena.
Interestingly, there is a pattern observed on Ethereum Foundation's sales. It often liquidates Ethereum just before significant sell-offs occur. While it is speculative to draw conclusions, the timing of its sales in relation to market movements has not gone unnoticed by keen market observers.