Ethereum: Here’s everything you need to know about ETH’s Bots and Sandwiches

  • Ethereum’s prices have been on a decline of late and the number of put options has increased.
  • MEV and bot activity on the Ethereum network went uphill.

 Ethereum’s [ETH] prices started to decline massively over the past few days. A lot of optimism was observed before Ethereum’s Shapella Upgrade, which allowed addresses to unstake their ETH from the beacon chain. However, as time passed, the sentiment around ETH started to change.

Read Ethereum’s Price Prediction 2023-2024

Over the last 24 hours, the value of ETH declined by 5.94% according to CoinMarketCap‘s data. The decline in prices was complimented by bearish sentiment from traders.

This was indicated by the fact that a large sum of OTM (Out of the money) block puts, which expire at the end of the month, made up 15% of daily trader volume.

For context, OTM block puts are option contracts with a strike price that is below the current market price of the underlying asset. These options would only be profitable if the price of the asset was to decrease significantly before the option expires.

Hence, the spike in block puts implied that traders were expecting ETH prices to fall further.

Bots and Sandwiches

On the Ethereum network, it was observed that there was a lot of bot activity going on. According to EigenPhi’s data, over the past month, MEV bots on Ethereum set a new record by earning $1.035 million in profits through 11,640 transactions. This included $940,000 in profits from sandwich attacks.

A sandwich attack is a type of front-running attack used by MEV (miner extractable value) bots in which they place two trades around a target trade to exploit the price difference for profit.

The high number of MEV bots and sandwich attacks can cause Ethereum’s network to slow down due to increased congestion and transaction fees. This can lead to a negative impact on the network’s overall efficiency and user experience.

Screenshot 2023 04 20 at 2.02.42 PM

Source: EigenPhi

Realistic or not, here’s ETH’s market cap in BTC terms

The Ethereum network was also impacted in terms of gas fees. Santiment’s data indicated that Ethereum lost its spot with respect to fee distribution. New assets such as APED and BOBO have taken the lead in this area.

However, the interest in NFT trading on Ethereum remained unaffected. For the third consecutive month, Ethereum NFTs saw a trading volume of over $1 billion, according to Delphi Digital’s data.

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