Ethereum records a $1M MEV block reward following Curve Finance hack
July 31, 2023 8:13 AM
The most recent 584 ETH block reward was generated by a MEV bot that front-ran transactions amid the DeFi chaos.
The recent exploit in Curve Finance apparently resulted in one of the highest MEV reward blocks in history, at 584.05 ETH.
In a post on July 31, Ethereum core developer "eric.eth" said, "today generated some of the most significant MEV reward blocks in Ethereum's history," attributing the spike in size to the attack of Curve Finance stable pools on the 30th of July.
March saw the largest MEV reward block to date, recording→ 692 ETH.
"A bot detects an incoming hack in the mempool, replicates the tx [transaction], and front runs it," he claimed before adding, "To do so, they pay the block producer a lot of ETH to be first in line."
A MEV bot is meant to earn additional money by rearranging and/or injecting transactions into an otherwise normal block in order to create arbitrage opportunities.
MEV bots can also detect imminent liquidation transactions and buy the liquidated assets early at a discount.
The validator is given the opportunity to submit a block via a relay, which outsources block production to businesses skilled in extracting this extra cash. In exchange for allowing the MEV bot to front-run the transaction, they will receive a portion of the revenue.
Some very large blocks have been recorded in the last few hours, earning their creators the coveted "block reward."
According to Beaconcha.in→, on July 31 at 1.34 a.m. UTC, the biggest MEV bot block reward was confirmed, worth 584.05 ETH, or over $1 million. Additionally, at that time, there were block rewards for both 345 and 247 ETH.
There were moral concerns voiced→ about the consequences of using potentially illegal monies to bribe validators to enable front-running of transactions, which was brought up in answers to the tweet.
"And this is where things start to get a little dodgy in terms of the legality of MEV awards being given to miners. These are essentially stolen funds."
During the memecoin trading frenzy in April, a Subway-themed trading bot extracted millions in extractable value by performing "sandwich attacks."