Sandwich Attacks Manipulate 35.5 Percentage of BNB Smart Chain Blocks in November

The BNB Smart Chain (BSC) saw a surge in malicious activity last month, with new data revealing that 35.5% of BSC blocks were manipulated through Sandwich attacks. This marked a new record high for the network, highlighting growing concerns over security on decentralized exchanges (DEXs) within the BSC ecosystem.

What Are Sandwich Attacks?

A Sandwich attack is a form of front-running exploit that occurs on decentralized exchanges. In these attacks, a malicious actor observes a large order about to be placed and strategically places two orders: one just before the victim's transaction and another right after. The objective is to manipulate the asset's price, allowing the attacker to purchase the asset at a lower price before the victim's transaction, and then quickly sell it for a profit after the victim's order is processed.

The primary intent of Sandwich attacks is to exploit the low liquidity of assets on DEXs, artificially inflating the price for the victim, which leads to a higher purchase cost. Consequently, the victim’s transaction loses value as a result of the price manipulation.

Record Highs for Sandwich Attacks on BSC

According to data from Dune Analytics, Sandwich attacks have become a major issue on the BNB Smart Chain. In November alone, 35.5% of the blocks on BSC were compromised, a figure that has never been higher. Over the course of the past week, more than 43,000 DEX traders were impacted by these attacks, marking a nine-month high for the network. In addition, 645 active bots were identified, executing manipulative trading strategies across BSC within the same period.

The surge in Sandwich attacks on BSC coincided with a 17% rise in the price of BNB, the native token of the BSC network. As of the latest data, BNB is priced at $656, with a market capitalization of $94.5 billion. This increase in token value may be adding further fuel to the price manipulation tactics on the network.

The Broader Impact on Decentralized Exchanges

The rise of Sandwich attacks on BSC comes at a time when DEX trading volumes are also on the upswing. In the past week alone, the total DEX trading volume on BSC reached $9.2 million, with a significant portion of these transactions being manipulated by bots exploiting the vulnerabilities of the system.

Comparing Sandwich Attacks on Ethereum

Interestingly, while Sandwich attacks are escalating on the BNB Smart Chain, the situation appears to be improving on Ethereum. Data shows that the percentage of Ethereum blocks affected by Sandwich attacks has been on the decline since July. The figure has fallen from 62.9% to 40.2% over the past five months. Despite this improvement on Ethereum, the number of DEX users impacted by Sandwich attacks on the network remains significant, with over 12,000 Ethereum users suffering from these exploits last month.

Looking Ahead: Solutions to Combat Sandwich Attacks

As Sandwich attacks continue to plague decentralized exchanges on both BNB Smart Chain and Ethereum, there are increasing calls for solutions that can mitigate these risks. Enhanced transaction privacy, better bot detection systems, and improved liquidity management could be key factors in preventing future attacks. However, with the decentralized nature of DEXs and the inherent transparency of blockchains, finding effective countermeasures remains a challenge for the industry.

For now, as the crypto market grows, both traders and developers must remain vigilant and adapt to evolving security threats to ensure the integrity and fairness of decentralized financial systems.