In the world of digital money, there are computer programs called #MEV bots. They are quietly making lots of money.
These programs are tricky but completely allowed by law!
MEV stands for Miner Extractable Value. This term talks about the money miners can make from their work in the world of #cryptocurrency . Miners here are like people digging for gold, but instead, they are dealing with digital coins.
How MEV Bots Make Money
MEV bots work in a clever way. They watch out for profitable transactions on the Ethereum network's 'mempool'. The 'mempool' is like a waiting room for all transactions that haven't happened yet.
These bots then copy any profitable transaction they find but offer to pay more to make sure their transaction happens first.
This means that the original transaction ends up 'sandwiched', leading to the original person unknowingly buying at a higher price or selling at a lower one. It's like thinking you've found a treasure chest, only to find it's been emptied right before you could open it - that's how an MEV bot operates.
The Shocking Scale of MEV Bots
What's shocking is how much money this is making. Recent studies found that these bots made $314 million in just the first three months of 2023! And all of this is perfectly allowed.
But don't worry, there's good news. The people who work with cryptocurrencies are trying to find solutions. #Ethereum #POS is expected to make it harder for these bots. Also, other projects like MEV Shield are being created to protect transactions.
So remember, when you're dealing with cryptocurrency, be aware of these MEV bots.
They may be hidden, but they're having a big impact.
Always stay alert, stay informed, and remember that knowing about all this is your best protection.