MEV and Sandwich Attacks: Systemic Challenges in the DeFi Ecosystem

In today's world, where blockchain technology continues to mature and the ecosystem grows increasingly complex, MEV (Maximum Extractable Value) has evolved from occasional vulnerabilities caused by transaction ordering flaws into a highly complex and systematic profit extraction mechanism. Among these, sandwich attacks, which leverage transaction ordering rights to insert one's own transactions before and after target transactions, manipulating asset prices to achieve low buy and high sell arbitrage, have garnered significant attention and have become one of the most controversial and destructive attack methods in the DeFi ecosystem.

1. Basic Concepts of MEV and Sandwich Attacks

The source and technological evolution of MEV

MEV (Maximum Extractable Value), originally referred to as miner extractable value, refers to the additional economic benefits that block builders can obtain during the transaction ordering process. Its theoretical basis lies in the openness of blockchain transactions and the uncertainty of transaction ordering in the mempool. With the development of tools such as flash loans and transaction packaging, the originally sporadic arbitrage opportunities have gradually been amplified, forming a complete profit extraction chain. MEV exists not only on Ethereum but also exhibits different characteristics on multiple public chains.

The principle of sandwich attacks

A sandwich attack is a typical operational method in MEV extraction. The attacker monitors transactions in the memory pool in real-time and submits their own transactions before and after the target transaction, forming a "front-run --- target transaction --- back-run" trading sequence, thereby achieving arbitrage through price manipulation. The core steps include:

1. Front-running: Driving up or down market prices
2. Target trade execution: Traders bear additional costs due to price deviation.
3. Post-trade: The attacker locks in profit from the price difference through reverse operations.

2. The Evolution and Current Status of MEV Sandwich Attacks

From sporadic vulnerabilities to systemic mechanisms

MEV attacks have evolved from early sporadic events into a systematic and industrialized arbitrage model. Attackers have built highly automated arbitrage systems that use high-speed networks and sophisticated algorithms to deploy front-running and back-running transactions in an extremely short time, and they acquire large amounts of capital through flash loans for operations. Currently, a single transaction can yield profits of hundreds of thousands or even millions of dollars, marking the MEV mechanism as a mature profit harvesting system.

Attack patterns of different platform characteristics

Different blockchain networks exhibit different attack characteristics due to their design philosophies and transaction processing mechanisms:

• Ethereum: Attackers prioritize transaction packaging order by paying higher gas fees.
• Solana: Although there is no traditional memory pool, the centralization of validator nodes leads to frequent attacks and larger profit margins.
• Binance Smart Chain: Lower transaction costs and a simplified structure provide space for arbitrage activities.

Latest Case

On March 13, 2025, a transaction of about 5 SOL on a trading platform was subjected to a sandwich attack, resulting in a loss of up to $732,000 for the trader. The attacker exploited front-running to seize block packaging rights, inserting transactions before and after the target transaction, causing the actual execution price to significantly deviate from expectations.

In the Solana ecosystem, sandwich attacks are not only frequent but also new attack patterns have emerged. Some validators are suspected of colluding with attackers by leaking transaction data to gain prior knowledge of users' trading intentions, thus implementing precise strikes. This has resulted in certain attackers' profits growing from tens of millions of dollars to over a hundred million dollars in a short period.

3. The Operating Mechanism and Technical Challenges of Sandwich Attacks

To implement a sandwich attack, the following conditions must be met:

1. Transaction Monitoring and Capture: Real-time monitoring of pending transactions in the memory pool.
2. Competition for Priority Packing Rights: Using higher gas fees to prioritize transactions for inclusion in blocks.
3. Accurate calculation and slippage control: Ensure that price fluctuations are driven without causing the target trade to fail.

The main challenges faced by attackers include the development of high-performance trading bots, the implementation of fast network responses, and the payment of high miner bribery fees. In the fierce competition, multiple bots may simultaneously attempt to seize the same target transaction, further squeezing profit margins.

4. Industry Response and Prevention Strategies

Prevention strategies for ordinary users

1. Set a reasonable slippage protection: Set a slippage tolerance according to market conditions.
2. Use privacy trading tools: Hide transaction data using technologies like private RPC.

suggestions for technical improvements at the ecosystem level

1. Transaction Ordering and Proposer-Builder Separation (PBS): Restricting a single node's control over transaction ordering.
2. MEV-Boost and Transparency Mechanism: Introduce third-party relay services to improve the transparency of the block construction process.
3. Off-chain order flow auction and outsourcing mechanism: Achieve batch order matching to reduce the possibility of individual operations.
4. Smart Contracts and Algorithm Upgrades: Enhance the monitoring and predictive capabilities for abnormal fluctuations in on-chain data.

V. Conclusion

The evolution of MEV sandwich attacks poses a severe challenge to the DeFi ecosystem and the security of user assets. Recent cases indicate that the risk of attacks on mainstream platforms still exists and is continuously escalating. To protect user assets and market fairness, the blockchain ecosystem needs to work collaboratively on technological innovation, optimization of transaction mechanisms, and regulatory cooperation. Only in this way can the DeFi ecosystem find a balance between innovation and risk, achieving sustainable development.