Why are sandwich attacks so common in DeFi?
DeFi operates on distributed public ledgers, meaning anyone can monitor pending transactions. This transparency, combined with the mechanics of AMMs, creates ideal conditions for malicious bots to detect vulnerable trades and execute sandwich attacks.
Key factors that make users susceptible:
- Public transaction mempools: Pending transactions are visible to everyone, including bots.
- AMM mechanics: Liquidity pooled between tokens on a bonding curve offers minimal control over trade execution and exposes users to slippage.
- Lack of awareness: Many users chalk up losses to market volatility, unaware they’ve been exploited.
