What Is a “Sandwich Attack” and How Does It Utilize Mempool Visibility?
A sandwich attack is a type of front-running where an attacker places two transactions around a victim's pending transaction. The attacker first buys an asset just before the victim's large buy order executes, driving the price up.
Then, immediately after the victim's buy order executes at the inflated price, the attacker sells their asset, profiting from the price difference. This attack exploits the victim's price impact.
Glossar
Sandwich Attack
Attack ⎊ Sandwich Attack is a specific form of front running where an attacker executes a buy order immediately before a victim's large intended buy order and then executes a sell order immediately after, effectively sandwiching the victim's transaction between two profitable trades for the attacker.
On-Chain Indicators
Metrics ⎊ On-chain indicators represent quantifiable data derived directly from a blockchain, offering insights into network activity and participant behavior.
Slippage Tolerance
Mechanism ⎊ Slippage tolerance, within cryptocurrency, options, and derivatives trading, defines the maximum acceptable difference between the expected price of a trade and the price at which the trade is actually executed.