With the help of a new feature dubbed RabbitHole, 1inch hopes to shield MetaMask users from a specific type of frontrunning.
Users may be subjected to a “sandwich attack,” a strategy for extracting the maximal extractable value (MEV) when trading on decentralized exchanges.
Here, a trader buys the token ahead of a huge purchase order, driving up the price. The price of the token increases once the purchase order is executed, at which time the trader sells at the new, higher price. As a result, the deal is carried out at a lower price for the victim.
Sandwich attacks still manipulate cryptocurrency values by exploiting the underlying technology of decentralized exchanges while not being strictly unlawful. Additionally, a sandwich attack could cause a user to suffer significant losses.
This occurs because blockchain transactions are often broadcast to the whole network and take time to be incorporated in chain blocks. Therefore, if it’s profitable enough, traders who can get their transactions into the chain early can frontrun trades.
Transactions that might be the target of such sandwich attacks are flagged by RabbitHole.
When a transaction is thought to be susceptible to such an attack, an alternate mechanism is used to enter the transaction into the blockchain. It prevents the transaction from being broadcast to the public by sending it immediately to a validator, like Flashbots.
The RabbitHole is designed as a proxy, connecting 1inch users’ MetaMask wallets and Ethereum validators. Its unique algorithm will check swap transactions on 1inch for the threat of a sandwich attack, and if such a threat is detected, the transaction will be sent directly to validators using one of the aggregated providers.
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