Researchers found Bots spying on Ethereum transactions

January 4, 2021

Sayan Mitra
36

The findings

 
ZenGo is a prominent cryptocurrency mobile wallet maker. Zenco did some researches in the crypto world. It found new observations in the Ethereum dark market. The research highlighted front running bots are spying on Ethereum transactions. Front running bots are nothing but malicious software. These bots are spying on other peoples’ transactions, specifically doing Ethereum transactions. This is basically for making huge profits at other’s expense. This may create gains for a few people. On the other hand, it will impact many authentic people badly, creating huge losses. So, the advice for developers is to build more secure systems.
 

Explanation with example

 
One famous example is the exchange bids. Let’s explain this with one example. If someone is buying a huge amount of ETH on any cryptocurrency exchange. This incident can trigger a huge fluctuation in the price of ETH. The price of ETH will go up immediately. Another person, who is monitoring this activity, will purchase ETH at a lower price. When the price will go up, he will sell this token at a higher price. In this way, he will make a large number of profits. Apart from this, there are many other ways to make profits. They are liquidations, buying rare NFTs, or user mistakes.
 

Studying the bots’ behavior

 
ZenGo carried out an experiment to understand the behavior of bots. The researchers trapped a few bots and locked them with cryptocurrency. After that, they studied their way of functioning. They tried to know how the bots are capturing the bait and how perfectly it is doing that. In addition, they also checked the probability of the success rate of this bait. They also experimented with ways of escaping the bots and not getting into their trap.
 
One of the first traps found was worth ETH 0.035 (USD 21). The time span is three minutes. Another incident found was for ETH 0.055. This was a different bot and it got completed only within few seconds. Lastly, an ETH 0.05 trap got created. Luckily, the researchers were successful in extracting all the funds. There are more sophisticated bots present in the crypto market.
 

Eminent personalities’ opinion

 
Dan Robinson and Georgios Konstantopoulos are prominent Defi investors. They highlighted the various attacks on the Ethereum blockchain by bots. They also focused on the consequences of these attacks by bots.
 
Alex Manuskin is a blockchain researcher at ZenGo. He conducted research about the front running bots trapping Ethereum transactions. Also, he mentioned that this activity is not something new on the Ethereum blockchain. He added that the reality is they are looking for bots that could possibly make some profits. It is easy to fall prey to such baits for higher returns. He emphasized that front runners are actually more prominent than one may think. According to him, it is possible to avoid these front-running bots but it is not at all easy to escape them. Each and every bot functions in different ways. Moreover, different factors trigger the transaction. There is a competition among the bots themselves to gain the highest bait. Lastly, he specified that this is only the tip of the iceberg. There is a whole new world of bots running the Ethereum blockchain transactions.
Sayan Mitra
Sayan Mitra

Sayan is a writer by choice or rather by instincts. He had started as a content writer for an infrastructure development website. Over the years, he has been involved in several versatile projects, ranging from blogging to creative writing, penning down web content to site reviews. Tourism, fashion, real estate, gambling, sports, politics, business proposals, presentation work, technical writing, generalized topics – Sayan has done it all, with his words.

36 Comments

Leave your thought here

X