What Are Crypto Sandwich Attacks?
If you’ve been into crypto trading , you’ve probably heard of sandwich attacks . These sneaky moves happen on decentralized exchanges (DEXs) like Uniswap , where bad actors exploit how transactions are processed on the blockchain .
Here’s how it works: A trader spots your pending trade, often a big one, and uses a bot to "sandwich" it. First, they front-run by buying the same asset just before your trade goes through, driving up the price. Then, your trade executes at this inflated price, known as price slippage , costing you more. Finally, they back-run by selling the asset right after, pocketing the profit from the price spike caused by your trade.
These attacks take advantage of blockchain transparency and slow transaction times, creating headaches for traders. To avoid getting sandwiched, try using limit orders to set a max price for trades. You can also explore layer 2 solutions or private transactions to hide your activity.
Platforms are fighting back too. Innovations like MEV-resistant tools aim to reduce these exploits by making trades fairer for everyone. While crypto sandwich attacks sound scary, small changes in your trading habits can help protect your investments.
Timestamps:
00:00 What are sandwich attacks in crypto
01:00 example of how crypto sandwich attacks work
05:00 Keep slippage low to prevent sandwich attacks
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