- An anonymous trader bought $8.9 million of WIF in a single order
- Order was filled at a price 1,400% higher than what the token was worth
- The trader lost 92% of his investment
A Solana-based bot raked in profit of $1.7 million from one single memecoin trade after an “investor” bought almost $9 million of the coin, Cointelegraph reported.
The maximum extractable value (MEV) bot took the profit when a luckless investor bought $9 million worth of Dogwifhat (WIF).
What happened?
The bot exchanged 703 SOL for 490,000 WIF and then vice versa, purchasing 19,035 SOL with the same amount of WIF. In the process, it generated a profit of $1.73 million, Solscan data shows.
MEV bots are automated apps that check for lucrative trading opportunities and fulfill the respective orders. The tool used by the bot to carry out this trade was developed by Jito Labs, the development branch of Jito, a Solana-based liquid staking protocol. The tool works like flash bots on the Ethereum Mainnet. It lets bots search for the MEV and make the corresponding bids.
Order was filled at a hyperinflated price
An anonymous trader bought $8.9 million of WIF in a single order in a low-liquidity pool. As a result, the order was filled at a price 1,400% higher than what the token was worth at the time. The trader lost 92% of his investment after the sudden and immediate drop following the transaction, which was equivalent to $8.2 million.
Bot used a simple “backrunning” strategy
Pseudonymous developer Pland posted on X that the MEV bot had used a relatively simple backrunning strategy to take the investor’s money. Backrunning involves executing a transaction immediately after another, higher-value transaction, where the trader can lose money.
However, backrunning is still not as bad as “sandwich” attacks, where an order is placed between two transactions, leading to repricing the initial bid. This often affects the initial trade price and traders lose money.
After the final transaction, WIF started gaining. It added 50% to its value from the point immediately after the drop.
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