Crypto traders name this tactic the sandwich trick. It works like that: On the network, when you as a trader notice someone trying to get a token, you place the same order, as well. If you manage to purchase before the other dealer, you will get a good opportunity on the token with high demand. Your gain increases the price for the other buyer. Therefore, by completing this maneuver, you get an easy profit.
This kind of method has long been an issue for people exchanging crypto. It appears on decentralized markets that run on Ethereum because traders can see transactions before they are completed. Computer programs named bots stalk the network for similar opportunities. This practice started to explode lately, using Flashbots, an open-source tool. Co-founder of a crypto-exchange aggregator – 1inch, Anton Bukov, said that before Flashbots, it was possible that the front-running might not even happen to you. He added that many people got access to this after its release. After that, all of them began to front-run those traders. It played as a gateway to a debate in the crypto community. This event can be familiar to people following arguments regarding high-frequency traders.
Do you think that computerized traders can take the money and empty the pockets of other people? Or you might think that this new technology could help the crypto market improve and develop itself?
People working as Flashbots say that they must try and solve severe problems.
Like Bitcoin, Ethereum operates on blockchain technology, maintained by computers that must be connected to the internet.
Co-founder of researcher Coin Metrics, Nick Carter, said they hadn’t discovered how exactly shenanigans miners operate. According to a Ph.D. student at Cornell Tech, Phil Daian, Flashbots can not eliminate shenanigans. However, they try to make them transparent and democratic.