🥪Sandwich Attacks
What is a Sandwich attack?
A victim transaction trades a crypto-currency asset X (ex: ETH, DAI, SAI, VERI) to another crypto-asset Y and makes a large purchase. A bot sniffs out the transaction and Front-Runs the victim by purchasing asset Y before the large trade is approved. This purchase raises the price of asset-Y for the victim trader and increases the slippage ( Expected price increase or decrease in price based on the volume to be traded and the available liquidity).
Because of this high purchase of asset Y, its price goes up, and Victim buys at a higher price of asset Y, then the attacker sells at a higher price.
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