Arbitrage bot’s spam attack on the Polygon network generated $6,800 per day


The expansion of layer-two protocols has been one of many main tales of 2021 because the rising reputation of decentralized finance (DeFi) and nonfungible tokens (NFT) have pushed transaction prices increased on the Ethereum (ETH) community successfully pricing out many members. 

Earlier this 12 months the Polygon community, previously generally known as MATIC, emerged as one of many prime contenders within the race for an efficient Ethereum layer-2 scaling resolution, and the mission’s QuickSwap DeFi platform was additionally one of many extra profitable Uniswap clones.

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The platform was fairly fashionable initially however as different platforms like Arbitrum and Optimism popped up, discussions about Polygon fell to the wayside and a few merchants even seek advice from the platform as “sluggish”. Information from Flipside Crypto exhibits that the low-cost capabilities of the Polygon community got here underneath assault after a cleverly devised arbitrage bot managed flip 14 Ether in 218.5 Ether in lower than 4 months.

The bot stuffed every block with “meaningless transactions”

In accordance with data from Flipside Crypto, the assault started in early Might and at one level in June, pushed transactions on the Polygon community went as excessive as 8 million per day. In the identical timeframe, the utmost variety of transactions on the Ethereum community was at 1.2 million.

Variety of transactions on Ethereum vs. Polygon. Supply: Flipside Crypto

Information discovered on a Polygon discussion board signifies that the attacker has been inflating transaction volumes by as a lot as 90% by stuffing every block filled with “meaningless transactions” whereas solely having to pay round 0.02 MATIC to spam your complete block and roughly $1,000 for a complete day.

A deeper dive into the transactions and addresses interacting on the community revealed that round 30% of the community’s transaction depend was coming from two contracts which have been decided to be arbitrage bots that conduct hundreds of each day transactions to numerous decentralized exchanges (DEX).

The precise purpose why the spammer selected to fill every block when the bots have been solely conducting 2,000 – 4,000 trades per day is unsure, however one principle is that it was carried out in an effort to stop anybody else from entrance operating the commerce.

Associated: Polygon can hit $3.50 in Q4 as MATIC’s 20% weekly rally triggers bull flag setup

The bot netted $6,800 in common each day revenue

Over a interval of 120 days, the bot was capable of develop an preliminary quantity of 14 Ether to 218.5 Ether, which is at present value $813,694.

That works out to a mean each day of revenue roughly $6,800 earlier than together with the price to spam the community.

In response to the spammer, the crew behind Polygon finally determined to extend the minimal price of a transaction from 1 gwei to 30 gwei as a solution to combat spam and enhance community well being.

The transfer seems to have achieved its supposed objective as data offered by Delphi Digital exhibits that the spike in common transaction prices coincided with a marked decline within the variety of each day transactions as a result of it now prices $30,000 to spam the community for a complete day.

Polygon common fuel price vs. each day transaction depend. Supply: Delphi Digital

Community knowledge exhibits that the spam transactions have dropped from 2 million to 500,000 transactions per day, a lower of 75%, however they nonetheless account for 16.7% of each day transactions. Which means that the bots are spending roughly $5,000 of their each day $6,800 revenue on fuel to maintain the scheme operating.

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