Register / log in
Read News For Me
Decentralized Finance (De-fi) has become the hype of the entire blockchain industry. With a total liquidity of more than 1.6 billion Uniswap has outpaced a lot of odds faced by the decentralised exchanges for over a decade.
There are hundreds of projects getting listed on uniswap everyday. Most of these tokens listed on uniswap are provided with thousands of dollars of liquidity. But the risk side of it is 'it has no control'. It is great to hear that only you can control your funds on the blockchain, but it has it's own drawbacks too.
With hundreds of new tokens getting listed to uniswap every day, it becomes easier for these backrunning bots, (Arbitrage bots) to find a lot of gapping holes in the system. In Uniswap, these backrunning bots can make upto $200,000 per day, a staggering figure. People think that providing liquidity to uniswap is the safest way for making money. But it is not anymore. Because you're at the risk of losing your money every second and the so called "Impermanent Loss" is a tricky term.
The address here mentioned is a backrunning bot 0x78a55b9b3bbeffb36a43d9905f654d2769dc55e8. This bot is mining millions of dollars from the liquidity provided to uniswap.
The backrunning bots are basically arbitrage bots. So for newbies arbitrage is a mechanism where the price change across various listed exchanges create a trade opportunity. So to stab these bots we must make sure that there is no price difference across various pairs on uniswap and other decentralized exchanges where the token is listed.
In centralized exchanges these are very much easier, but in case of decentralized exchanges or aggregators the trade times are highly unreliable so the chances of the bot executing a trade before you understand the concepts are highly possible. So the advice would be if you don't want to spend thousands of bucks in making markets for you token, then just list it in one decentralized exchange with only one trading pair to counter attack these bots.