Sandwich Attack
A sandwich attack is a DeFi trading attack where a bot places one trade before and one trade after a user’s transaction.
✦ Key Insight
It can make users receive worse prices on swaps.
✕ Common Misconceptions
Setting slippage tolerance too high or trading in thin liquidity pools.
Detailed Explanation
How It Works
The bot buys before your trade, your trade pushes price higher, then the bot sells after you.
FAQs
How can I reduce sandwich risk?
Use lower slippage, trusted routing, and MEV protection tools.
In Practice
Dig Deeper
Slippage
Slippage is the difference between the price a trader expects when submitting an order and the actual price at which the trade executes. Slippage is common in crypto markets and is usually more noticeable during high volatility or when trading low-liquidity tokens.
Liquidity Pool
A liquidity pool is a collection of crypto assets locked in a smart contract that allows users to trade tokens on decentralized exchanges without relying on a traditional order book.
MEV
MEV (Maximal Extractable Value) is the profit that can be extracted by reordering, including, or excluding transactions in a block beyond standard block rewards and fees. It is the on-chain equivalent of high-frequency trading edge, plus features unique to public mempools and smart-contract composability.