An Ethereum (ETH) arbitrage trading bot has managed to make $1 million. Also managed to lose everything on the same day in an ironic twist in decentralized finance (DeFi).
800 Ethereum earned
A Maximum Extractable Value (MEV) trading bot has been able to earn 800 ETH through arbitrage trades. This equates to approximately $1 million.
Robert Miller, an employee at research firm Flashbots, indicated that this particular bot was able to take advantage of a huge arbitrage opportunity that occurred when a trader tried to sell $1.8 million in cUSDC through the Uniswap v2 and received only $500 in assets. The bot discovered this opportunity and immediately jumped into action and made huge profits.
Lost everything again
About an hour later, however, a hacker managed to exploit a vulnerability in the code. This allowed him to authorize the transaction that transferred the balance of a total of 1,101 Ethereum to the cyber attacker’s address. As a result, the hacker managed to steal a total of about $1.4 million. Blockchain security company PeckShield also noticed.
According to PeckShield, the bug can be traced through the bot’s callback routine. This was therefore misused by the hacker to approve a random address for expenses.
