Ethereum MEV Bots have recorded considered one of their most profitable days as a result of the Curve Finance exploit. Ethereum’s core developer Eric Connor made this revelation in a few tweets on the X platform.
Today has produced a few of the largest MEV reward blocks in Ethereum’s history.
Slot 6,992,273: 584 ETH
Slot 6,993,342: 345 ETH
Slot 6,992,050: 247 ETH
Slot 6,993,346: 51 ETH— eric.eth (@econoar) July 30, 2023
How These MEV Bots Work
As revealed by Connor, one Maximable Extractable Value (MEV) bot received over $1 million in ETH from reproducing and front-running an incoming hack within the Curve stablepools. Three other MEV bots earned 345 ETH ($641,000), 247 ETH ($459,000), and 51 ETH ($94,600) respectively from the transactions.
In total, MEV bots earned $11.1 million within the 24-hour period, making it essentially the most profitable day for MEV bot deployers since Ethereum accomplished the move to Proof of Stake (PoS).
For more insight as to how these works; MEV bots help traders discover large transactions and exploit the chance to generate extra revenue through arbitrage. With the intention to achieve success, these traders should front-run these incoming transactions, and to do that, they pay block producers a major amount of ETH so their transactions can gain priority, helping them to be validated first.
ETH price still trailing at $1,860 | Source: ETHUSD on Tradingview.com
Morality Of Validators Called Into Query
On this case, the identical strategy was applied, and after these MEV bots had discovered the incoming exploit on Curve’s stablepools, ETH validators were paid to present these MEV transactions priority. This event has led many to query the morality of those validators into query with many noting that the cash paid to those validators is the proceeds of hacked funds.
“And that is where the morality of MEV rewards going to miners gets pretty shady. These are effectively hacked funds,” A user (@apedev) tweeted.
Seeing the outrage from different users, Connor went so far as conducting a poll to get people’s thoughts on block producers receiving MEV rewards that got here consequently of a hack. On the time of writing, 44.9% of respondents imagine that these bot deployers should keep the rewards against those calling for these deployers to return the rewards.
Connor noted this case as “probably a legal grey area,” likely in reference to what the liability of deployers shall be in the event that they were to earn a living from the proceeds of against the law (hack). He also stated that deployers returning these funds just isn’t as straightforward because it appears.
One MEV bot deployer has, nonetheless, acted in good faith and within the spirit of ethical hacking by returning revenue generated from frontrunning the hacker’s transaction.
Based on on-chain data, a wallet “c0ffeebabe.eth” returned 2,879 ETH ($5.3 million) to Curve’s contract address.
Featured image from CoinMarketCap, chart from Tradingview.com