A Uniswap V3 user endured a costly blunder. The individual, presumably confusing the Curve DAO Token (CRV) for USD, initiated a liquidity pool transaction with severe consequences. The action, unfolding in a rapid 12-second window, resulted in a staggering loss exceeding $700,000.
MEV bots capitalize on human error
In the aftermath of the transaction, MEV bots, which specialize in extracting Miner Extractable Value, swiftly mobilized. These bots exploit price discrepancies resulting from blockchain transactions. The most adept bot secured a modest profit, overshadowed by the immense ‘priority fee’ it paid to validators. This fee, colloquially termed a ‘bribe’, ensures that a bot’s transaction is processed ahead of competing transactions. This particular incident saw the winning bot outlay a hefty $527,000 to supersede its rivals.
The Uniswap platform, which operates on the Ethereum blockchain, allows users to swap various cryptocurrencies without the need for a centralized party. The user involved in this recent incident added approximately $1.56 million in wrapped Bitcoin (WBTC) to a Uniswap liquidity pool. Instead of the expected USD equivalent, they received 1.56 million CRV tokens. At the time, the value of these tokens was markedly lower, around $850,000, leading to an immediate and substantial loss.
Arkham, a blockchain analytics firm, offered insights into the event but withheld sympathy, tersely remarking, “Tough luck.” Such errors, often dubbed “fat finger” mistakes, have become increasingly common in the cryptosphere.
MEV Bots instantly rushed the pool to swap CRV for valuable WBTC – with the first bot making off with $1.36M in WBTC for only $730K in CRV.But the bot only netted ~$260, paying $527K of ETH to the validator just to make this transaction.Tough luck! pic.twitter.com/3JbVwhwYoj
— Arkham (@ArkhamIntel) November 4, 2023
Similarly, just last month, another user erroneously swapped about $130,000 in a stablecoin USDR, which unfortunately turned out to be valueless.
