🔍 Understanding Sandwich Attacks in DeFi

Ever wondered how attackers exploit transactions in decentralized exchanges? Let’s break down the Sandwich Attack:

🚨 How It Works:

1️⃣ A victim submits a BUY transaction to the mempool.

2️⃣ An attacker detects this and submits two transactions:

BUY with a higher gas fee (to front-run the victim).

SELL with a lower gas fee (to back-run the victim).

3️⃣ The block producer orders these transactions based on gas fees.

4️⃣ The attacker’s BUY increases the token price. The victim’s BUY executes at a higher price near the slippage limit.

5️⃣ The attacker’s SELL finalizes, profiting from the price increase caused by the victim's transaction.

💡 Result: The victim pays more, while the attacker profits.

What are your thoughts on combating sandwich attacks?

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