Sandwich attacks take advantage of delays in Solana transactions.
In an attempt to combat disruptive trading practices, cryptocurrency traders have collectively invested more than $9.5 million in recent weeks to safeguard Solana transactions against so-called “sandwich attacks.”
This phenomenon, common in blockchain ecosystems, involves the presence of bots that exploit transaction latency, placing their own orders before and after a target transaction, and thus manipulating market prices.
“Sandwich Attacks”: How Do They Work?
A “sandwich attack” consists of “sandwiching” a user’s transactions between two attacker transactions. Two attacker orders are before and after the user’s order (hence the name sandwich), generating a loss for the user and a gain for the attacker. Sandwich attacks typically take place on decentralized exchanges (DEX) and result in price manipulation.
According to Forbes: “the MEV bot detects another person’s intention to buy a coin and prepares to benefit from the small price appreciation that the other person’s bid is likely to cause.” Forbes further explains the following:
“The bot jumps the line to buy the coin for a fraction less, leading the trade. After the purchase is made by the mark in the middle, the bot completes the sandwich by automatically selling the token at a profit.”
Cryptocurrency Traders Want to Stop Solana’s “Sandwich Attacks”
Jito, a leading security provider within the Solana network, has been at the forefront of implementing protective measures. The company provides a service in which users pay a nominal amount to have their transactions grouped and processed privately.
Such approach effectively protects transactions from predatory bots that seek profits through “sandwich attacks.” Addressing these attacks has become a pressing need, given the growing impact of attacks on retail traders and the Solana community in general.
Sandwich attacks are a nuisance and a significant threat to the financial integrity of blockchain transactions. By manipulating transaction orders, attackers inflate token prices momentarily, profiting from sales after the transaction is executed.
Questions have also been raised about the role of Solana validators. Some community members accuse them of using their delegated staking to engage in sandwich attacks, exacerbating the problem. This has sparked calls for greater transparency and accountability from Solana developers.
“Solana validators who are using delegation stake to literally rob retail via sandwich attacks,” said the CEO of Helius via X.
Solana has seen a 599.92% price surge in 2023, largely caused by the meme coin frenzy. The SOL price, though, has suffered a recent drop of 3.52%, despite making a 20.53% gain last week, highlighting the volatile nature of the cryptocurrency market.
By Leonardo Perez
