There was a lot of excitement in the crypto community, as many expected and awaited the launch of the APE coin. The coin was launched by the Bored Ape Yacht Club and experienced tremendous growth as it was listed on many top exchanges. The event took place on March 17 and many holders of BAYC NFTs received the coin in an airdrop that took place.
While the trades were taking place, one of the bots sold 2.4 APE $2.7 million in ETH.
This particular trade caught the attention of many traders and went viral. But was that real, or what happened in that transaction?
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APE transaction details
according to an expert to explain the viral transaction, the incident was what is known as an attack – Sandwich Attack. This attack is sometimes possible due to the way some swap protocols such as SuchiSwap and UniSwap work.
For example, a transaction sent to the Ethereum network will not be executed immediately or will be added to a block immediately. But first it will enter a mempool and stay for some time until a miner chooses it. The way miners choose the trades to add to a block depends on gas rates. If the owner pays a high gas fee, the miners will prioritize such a transaction.
Another factor is that setting slippage on a decentralized exchange that trades coins, such as Uniswap, means you’ll be ready to pay higher gas fees after your trade is executed. As a result of all these factors, MEV (Miner Extractable Value) bots come forward to monitor the more profitable trades.
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These Bots then increase the transaction price based on the amount the owner is willing to pay after execution. They will then place the initial trade between two other trades involved in a swap.
So this situation arose in the APE transaction. Someone wanted to trade 1.5 ETH for the newly launched APE tokens, but a bot then sent 2 other trades before and after the main trade.
This became apparent when the first trade used 4.13 ETH to buy APE, and followed the original trade, facing slippage. After that, the last trade sold the new coins for 4.45 Eth and made some profit in the block.
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So while the transaction drove many crazy, the expert explained that it was simply a Sandwich attack carried out by Value bots.
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