MEV Bot Scores $1.7 Million Profit in One Trade with Dogwifhat's 'Inefficient' Transaction

A Solana-based Maximum Extractable Value (MEV) bot made a significant windfall, pulling in an impressive $1.7 million from a rather unconventional trade involving an $8.9 million purchase of the memecoin Dogwifhat (WIF).

Operated by 2fast, the MEV bot executed a clever move by exchanging 703 Solana SOL tokens for 490,000 WIF and promptly converting that same amount of WIF into 19,035 SOL within the same transaction bundle. Solscan data reveals that this strategic play resulted in a substantial profit of $1.73 million for the MEV bot.

MEV bots are automated programs designed to scan blockchain networks, identifying lucrative trading opportunities and automatically executing orders. In this case, the bot employed a tool developed by Jito Labs, the development arm of the Solana liquid staking protocol Jito. Similar to Ethereum's flashbots, this tool allows bots to search for maximum extractable value and place bids for inclusion in transaction bundles.

The unique opportunity for this arbitrage play emerged after a trader, identified as zeroxtrading.sol, executed a massive $8.9 million purchase of WIF in a single order. This bid took place in a low-liquidity pool, causing the order to be filled at an exorbitant rate of approximately $3 per WIF token—roughly 1,400% more than its actual value at the time. Unfortunately, the subsequent sharp drop in price led the trader to instantly lose 92% of their funds.

According to a post on X (formerly Twitter) by pseudonymous developer Pland on Jan. 11, the MEV bot employed a relatively straightforward backrunning strategy to capitalize on the inefficiency of the trader's WIF order.

It's worth noting that backrunning is considered less harmful to a blockchain network since it merely seizes the arbitrage opportunity presented by a significantly mispriced trade without impacting the initial transaction. This stands in contrast to more malicious "sandwich" attacks, where an order is sandwiched between two transactions, causing the initial bid to be repriced and frequently leaving users at a loss.

Despite the trader's substantial losses, the WIF price briefly spiked to $4 following the single transaction. Interestingly, enthusiasts were quick to start purchasing WIF again, resulting in a 50% gain for the memecoin from the point immediately after the drop.

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