Ethereum-based projects have joined forces to protect against exploits involving maximal extractable value (MEV).
CoW Swap, BeaverBuild, and Agnostic Relayer have launched a new MEV protection tool. MEVBlocker.io will reportedly pay users to protect themselves across DeFi, dApps, and when trading NFTs.
MEV Blocker routes transactions through a searcher network to block attacks. Searchers bid to backrun transactions, with 90% of profits going to users and 10% to validators.
Over 30 names in the Ethereum ecosystem supported the project, including bloXroute Labs, 1inch Network, Balancer, and GnosisDAO.
What Is an MEV?
“Maximal extractable value” is a technique used by so-called “searchers” to take advantage of other transactions. They do this by submitting the same transaction as you but faster. This so-called “frontrunning” causes you to get a worse deal.
Another technique is “backrunning,” where the searcher cleans up any residual effects of the trade. The attacker then keeps the profits for themselves. When these two methods are combined, it’s called a “sandwich attack,” which is considered the worst form of MEV. Victims of MEV can potentially lose hundreds or even thousands of dollars.
Only a few days previously, hackers exploited MEV bots to steal over $25 million. The hacker then kept the stolen funds in three separate addresses.
On April 3, an attacker replaced regular transactions with malicious ones, compromising MEV bots and stealing their funds.
They likely waited for their turn as a validator to propose a block, then reorganized it and created a new one with malicious transactions to drain assets. The attacker deposited 32 ETH as a validator 18 days prior to the incident to prepare.
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