Linking MEV attacks to further maximise attackers' gains: evidence from the Ethereum blockchain

Abstract

With the advent of blockchain, Decentralised Finance (DeFi) has become an accessible and decentralised way to create financial services. Under the umbrella of DeFi services, we find Decentralised Exchanges (DEXs) i.e., smart contracts that allow one to exchange tokens. Over time, new malicious activities have begun to spread, particularly those related to DEXs. Maximal Extractable Value (MEV), a practice in which block creators can add, remove, or change the order of transactions to increase their gains at the expense of other users, is becoming pervasive.In this study, we collected a 2-year dataset and analysed the MEV activity on the Ethereum blockchain. With our analyses, we show that despite the countermeasures, the problem is still actual and that the value extracted could hinder the adoption of Ethereum in future projects. Furthermore, we provide an in-depth analysis of DEX platforms and tokens that are more susceptible to MEV attacks, showing that major markets are still far from solving the problem. Finally, we show that MEV attackers are becoming more sophisticated as they tend to chain different types of attacks (i.e., sandwich and arbitrage). Linked attacks are more profitable, as attackers extract more than 5 billion USD, while traditional attacks net 382 million USD.