DeFi
Solana users pay millions to prevent bots from attacking their transactions – DL News
- Sandwich robots are wreaking havoc on Solana.
- Users have turned to infrastructure company MEV Jito to help protect them.
- The Solana Foundation takes a strong stance against those who maliciously target user transactions.
Solana’s memecoin frenzy and wave of token airdrops have attracted more users, pushing trading volume on the network to unprecedented levels in recent months.
But the increase in trade poses a big problem.
People involved in running the software that helps process transactions have a greater incentive to run bots that rearrange transactions for profit — a practice known in crypto circles as MEV, or maximum extractable value.
One of the most common types of MEV is the sandwich attack. Bots conduct sandwich attacks by scanning Solana for users purchasing a token, then jumping the queue and placing a large order in front of them, thereby increasing the price of the token.
Once the victim’s transaction is processed, further increasing the price, the bot sells the tokens at a new, higher price.
“The sandwich is extremely profitable but terrible for users and for the long-term success of the network,” said Jito Network contributor Lucas Bruder. DL News. Jito is a Solana MEV infrastructure company.
Jito’s answer to sandwich bots is to charge users a small tip, at least around $0.04 per transaction under normal network conditions, for processing their transactions privately.
Once a user pays a small tip to Jito to execute their transaction, their transaction is included in a private package that is processed through a Jito validator. Validators are software instances that process transitions on Solana.
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This means that these malicious MEV bots will not be able to see these transactions on the network before they are processed, protecting users from sandwich attacks.
Jito’s solution proves popular. Over the past week, users paid $9.3 million value of SOL in advice to protect their exchanges. And if Solana’s trading volume increases, Jito could earn even more.
What is a “good” MEV?
Bruder said that in addition to individual users protecting their trades, part of Jito’s increased usage comes because arbitrage traders have more opportunities for profitable trades due to the increase in Solana trading volume.
“Arbitrage and other forms of MEV, such as DeFi liquidations, can be considered ‘good’ MEVs as they help maintain orderly and efficient markets,” Bruder said.
Arbitrage traders take advantage of price differences that arise between exchanges to make a small profit. This helps maintain accurate pricing and ensures Solana users get fairer prices when transacting.
This is not a new problem
Sandwich robots are not unique to Solana. On Ethereum and other public blockchains, these robots target user professions.
Users can switch to custom RPCs to avoid being sandwiched. An RPC – or Remote Procedure Call – is a type of computer server that allows users to send transactions to different blockchains.
But setting up a custom RPC can be difficult, especially for the average user. Jito’s solution is integrated with popular trading platforms such as the browser application for Jupiter Aggregator and several major wallets. For most users, paying a small fee is a more convenient and readily available way to avoid sandwich bots.
Combating sandwich bots on Solana is also a more pressing issue than on other networks like Ethereum. This is because bots can target a higher proportion of transactions on Solana due to the network’s lower transaction fees.
The fact that much of Solana’s trading activity involves memecoins, assets that typically have low levels of liquidity, has only compounded the problem. Assets with low liquidity experience greater price fluctuations when traded, creating more opportunities for sandwich robots.
Additionally, Bruder said, the Solana community is trying to achieve social consensus – a process by which individuals agree on a change that will be made to a blockchain – to avoid supporting those who target users with sandwich attacks. “This reveals which actors are aligned with Solana and which are not,” he said.
Eliminate Bad Actors
The situation is being taken seriously at the highest levels.
“Operators engaging in malicious activity such as…sandwich attack transactions or otherwise harming Solana users will not be tolerated,” said Tim Garcia, head of validator relations at the Solana Foundation, in a press release. Tuesday article in Discord from the developers of Solana, a messaging app.
The Solana Foundation, a nonprofit organization dedicated to the decentralization, adoption, and security of Solana, runs a validator delegation program. Those interested in running a validator can seek help from the foundation to cover their costs and ensure they can run a validator profitably.
Garcia said validators that maliciously target transactions will be “immediately and permanently removed” from the program. “Coercive measures will begin in the next 24 hours,” he said.
Tim Craig is a DeFi correspondent at DL News. Do you have any advice? Send him an email to tim@dlnews.com.