aximal extractable value, or MEV, refers to profit opportunities that arise from reordering or otherwise manipulating transactions on the blockchain. Also called transaction ordering dependency attacks, these exploits allow savvy bots and traders to earn considerable sums. On Ethereum, MEV bots have drained over $1.38 billion from users as of April 2023 according to estimates.
Solana, a prominent blockchain platform for decentralized applications, has also faced increased MEV attacks recently. However, one particular bot stands out for the enormous profits accumulated in a short time.
The Stealthy "Arsc" Bot
Crypto analyst Ben Coverston of MRGN Research revealed that a Solana sandwich bot known as "arsc" had likely amassed around $30 million in just two months through MEV arbitrage techniques. Coverston traced some of the bot's primary wallets and activities on the network.
The "Bank", "Cold Storage", and Active Wallets
Coverston identified three main addresses associated with the arsc bot through on-chain transaction tracking. The first, labelled a "bank" wallet, actively moved funds to commit numerous MEV attacks. A second served as inactive "cold storage" holding sizableSOL and stablecoin reserves. The third wallet engaged in more visible DeFi protocols like lending and stablecoin swaps. Together these addresses were valued at nearly $30 million at the time.
Staying Under the Radar
Despite considerable profits, the operator behind arsc seemed to make efforts to avoid attention. The "cold storage" wallet was mostly dormant, while signers and tippers were used across numerous transactions. Even the "active" wallet gradually moved holdings into off-chain assets. According to Coverston's analysis, arsc's methods grew more opaque over the two months.
A Lucrative Niche on Solana
Through clever algorithms and strategic wallet activity, the anonymous arsc was highly effective at exploiting MEV opportunities on Solana. While raising concerns about protocol-level issues, it also demonstrated the strong incentives for such profitable arbitrage in the DeFi ecosystem. As long as networks enable transaction reordering, MEV attacks will likely be a lucrative niche for skilled traders. Whether more can be done to reduce their impact while maintaining an open blockchain remains an ongoing discussion.
