Finance & Economics

1inch Offers Protection Against ‘Sandwich Attacks’

The new tool allows users to submit transactions directly to validators, bypassing the mempool

sandwich attacks

Sandwich attacks in DeFi are a form of front-running. Source: images.indianexpress.com

Exchange aggregator 1inch launched a new product called “Rabbithole” on Nov. 25. The company says it will protect traders against malicious “sandwich attacks.” 

Sandwich attacks in DeFi are a form of front-running where an attacker scans the blockchain’s mempool until it finds a high-value transaction to front-run and back-run simultaneously so that the original pending transaction is sandwiched in between. 

First, an attacker submits a transaction with a higher gas fee to be processed before the victim’s purchase. As this early transaction pumps the price of the coin to be purchased, the victim automatically pays more. After the victim’s transaction is processed, the attacker submits a second transaction that sells their coins, pocketing the difference in price. 

“Rabbithole” allows users to submit transactions directly to validators, bypassing the mempool. Therefore, the possibility of tracking and sandwiching a crypto purchase gets low.

To use the new service, 1inch customers need to change the remote procedure call (RPC) endpoint in their crypto wallet. Then, each swap will be analyzed by the private routing algorithm and sent to validators directly if there is a possibility of a sandwich attack.

SEE ALSO:

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Singaporean DBS Applies DeFi to FX and Securities Trade

Australian Stock Exchange Postpones Blockchain Plans

Nina Bobro

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https://payspacemagazine.com/

Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.