How a MEV Bot Made $1.27 Million with Only $4 Investment

The Rise of MEV Bots in Flash Loan Attacks

A recent flash loan attack conducted by a maximal extractable value (MEV) bot has resulted in the theft of approximately $1.27 million worth of the BlackHole (BH) token. MEV bots have gained significant attention this year, with some utilizing them for sandwich attacks and arbitrage opportunities.

Details of the Flash Loan Attack

According to EigenPhi, a MEV data website, there was an arbitrage MEV attack on the BNB chain involving the BH token. Beosin Alert, a blockchain security platform, estimates the loss to be $1.27 million. The attack involved flash loaning a large amount of USDT and manipulating liquidity ratios to withdraw more funds.

MEV bot, flash loan attack, BH token, Platypus finance — Arbitrage MEV attack on BH token. Source: EigenPhi

After successfully executing the flash loan attack, the attacker used Tornado Cash, a crypto mixer, to siphon off the stolen funds. The attacker sent batches of 100 BNB to Tornado Cash.

Increase in Rug Pull Incidents on BNB Chain

In addition to this MEV bot attack, there has been a surge in rug pull incidents on the BNB chain. These incidents involve projects suddenly pulling out liquidity and disappearing with investors’ funds.

MEV bot, flash loan attack, etherscan — Attacker moves funds to Tornado Cash. Source: Etherscan

Platypus Finance Exploit and Flash Loan Attacks

Earlier this week, Platypus Finance, a decentralized finance (DeFi) protocol, fell victim to a $2 million exploit. The exact nature of the transaction is unknown but it is suspected to be a flash loan attack. This is not the first time Platypus Finance has experienced such an incident, as they lost $8.5 million in flash loan attacks earlier this year.

Flash loan attacks involve taking out and repaying a crypto loan within the same transaction. These types of attacks allow bad actors to manipulate the market in their favor, resulting in significant financial losses for victims.

Hot Take: Flash Loan Attacks Highlight the Need for Enhanced Security Measures

The recent flash loan attacks on BH token and Platypus Finance serve as reminders of the vulnerabilities in the crypto space. As MEV bots continue to exploit arbitrage opportunities and conduct malicious activities, it is crucial for blockchain platforms and DeFi protocols to implement robust security measures to protect users’ funds. Enhancing transparency, conducting regular security audits, and educating users about potential risks can help mitigate the impact of flash loan attacks and safeguard the crypto ecosystem.