Erik Weijers, a year ago

Arbitrage bot benefits from fat finger: 180 ETH gain on Moonbird

Was it a typo which caused the extra zero or a 'fat finger'? A trader who didn't know what he was doing? On LooksRare, someone placed an order on a Moonbird for ten times the average floor price. An arbitrage bot immediately took advantage of it and pocketed 180 ETH.

Arbitrage bots are the predators of the Ethereum mempool. They are constantly scanning transactions in this queue, in order to take advantage of them. On April 22, one such specially trained predator - also called a searcher - found prey. Someone had made a so-called generic bid of 240 ETH for any Moonbird. That's about ten times the bottom price. The bot didn't hesitate and bought a random Moonbird for 44 ETH, which it immediately sold for 240 ETH to the clueless bidder. All that in one complex transaction.

It is perhaps no surprise that this arbitrage bot was targeting bidders for Moonbirds on LooksRare. LooksRare is a rapidly emerging competitor to OpenSea. Moonbirds prices have exploded since the launch and there is a lot of trading going on. No doubt many inexperienced traders are jumping in. One of those traders will now be licking his wounds.

A dark forest

There are many ways in which you, as a crypto investor, can fall victim to your own hurry, carelessness, or mishandling. The first category of mistakes is carelessness. You won't be the first one to accidentally place his bid on an NFT in ETH instead of USDC. Oops, you accidentally paid a few thousand times more than you had in mind.

Another category of mistakes has to do with sloppy or overly creative security measures. Instead of keeping your seed phrase on paper, you decide to store it in your Dropbox. Everything's online these days, innit? Or you think: let's cut the 24 words seed phrase into eight parts and hide the parts in eight different places in my home. Extra secure, right? A year later you feel like the squirrel that has forgotten where it hid all the beechnuts - and you do need all of them...

Also notorious are bots that scan for seed phrases that fall into the category of password123-level protection. When creating wallets, users have the option to choose the seed phrase themselves. But people are bad at generating randomness. Sometimes they simply choose the opening sentence from a famous novel. There are bots lurking that empty the corresponding addresses within seconds...

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