Report: Crypto trading bots are making billions of dollars by ‘Sandwich Trading’

Feb 28, 2022

Bots are using “sandwich trading” to rake in massive amounts of profit across the Ethereum ecosystem.

The term refers to a process where bot is programmed by software developers to spot when another trader is attempting to purchase a crypto asset on a blockchain, such as Ethereum or Cardano.

The bot places an order on the same token. The bot then “completes the sandwich” by selling the token to the original trader at a higher price tag.

The method has become so successful that developers are finding it increasingly difficult to execute due the sheer number of other bots attempting “sandwich trading.”

The end result has been a fanning out of “sandwich trading” bots to other blockchains, notably Solana, Polygon and Avalanche.

The reports notes that in January Solana was forced to implement new developments to address the bot traders, including “flow control” measures.