A crypto trader fell victim to a sandwich attack while making a $220,764 stablecoin transfer on Uniswap v3

The MEV bot front-ran the transaction by swapping all the USDC liquidity out of the Uniswap v3 USDC-USDT pool and then put it back in

A crypto trader fell victim to a sandwich attack while making a $220,764 stablecoin transfer on March 12, losing almost 98% of its value to a Maximum Extractable Value (MEV) bot.

The trader lost $215,494 after attempting to swap the $220,764 to another stablecoin, Tether (USDT), on decentralized exchange Uniswap v3. The stablecoin was part of a larger sum borrowed from borrowing and lending protocol Aave.

The transaction was swiftly canceled three to four minutes earlier by an MEV bot, which used the opportunity to swap out all the USD Coin (USDC) liquidity on Uniswap v3 and put it back in after the transaction was executed.

The attacker, who tipped Ethereum block builder “bob-the-builder.eth” $200,000 from the $220,764 swap, managed to profit $8,000 from the transaction, according to founder of The DeFi Report Michael Nadeau.

DeFi researcher “DeFiac” speculates the same trader using different wallets has fallen victim to a total of six sandwich attacks, citing “internal tools.” They pointed out that all funds traveled from Aave before being deposited on Uniswap.

Two of the wallets fell victim to an MEV bot sandwich attack on March 12 at around 9:00 am UTC. Ethereum wallet addresses “0xDDe…42a6D” and “0x999…1D215” were sandwich attacked for $138,838 and $128,003 in transactions that occurred three to four minutes earlier.

Both transactors made the same swap in the Uniswap v3 liquidity quickly and had the same interesting routing on Aave.

“If you have NK illicit funds you could construct a very mev-able tx, then privately send it to a mev bot and have them arb it in a bundle,” said founder of crypto data dashboard DefiLlama, 0xngmi.

“That way you wash all the money with close to 0 losses.”

While initially criticizing Uniswap, Nadeau later acknowledged that the transactions didn't come from Uniswap's front end, which has MEV protection and default slippage settings.

Nadeau backtracked on those criticisms after Uniswap CEO Hayden Adams and others clarified the protections Uniswap has in place to fight against sandwich attacks.