The arbitrage bot’s spam attack on the polygon network generated $ 6,800 a day


The growth of Layer 2 protocols has been one of the key stories of 2021 as the rising popularity of decentralized funding (DeFi) and non-fungible tokens (NFT) has driven transaction costs on the Ethereum (ETH) network and many Effectively prizes participants.

Earlier this year, the Polygon Network, formerly known as MATIC, emerged as a top contender in the race for an effective Ethereum Layer 2 scaling solution, and the project’s QuickSwap DeFi platform was also one of the more successful Uniswap clones .

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The platform was quite popular at first, but when other platforms like Arbitrum and Optimism emerged, discussions about Polygon fell by the wayside and some traders even refer to the platform as “slow”. Data from Flipside Crypto shows that the low-cost capabilities of the Polygon Network were attacked after a sophisticated arbitrage bot turned 14th in less than four months.

The bot filled every block with “pointless transactions”

According to data from Flipside Crypto, the attack began in early May and sometime in June, push transactions on the Polygon network rose up to 8 million per day. During the same period, the maximum number of transactions on the Ethereum network was 1.2 million.

Number of transactions on Ethereum vs. Polygon. Source: Flipside Crypto

Data found on a Polygon forum shows that the attacker increased transaction volume by up to 90% by filling each block with “meaningless transactions” while only having to pay about 0.02 MATIC to spamming the entire block, and about $ 1,000 for a full day.

A deeper look at the transactions and addresses that interact on the network revealed that about 30% of the network’s transaction count came from two contracts classified as arbitrage bots that perform thousands of transactions on various decentralized exchanges (DEX) every day .

The exact reason the spammer chose to fill each block when the bots were only making 2,000-4,000 trades per day is uncertain, but one theory is that this was done to prevent others from taking the trade carry out.

Related: Polygon can hit $ 3.50 in the fourth quarter as MATIC’s weekly 20% rally triggers the bull flag setup

The bot made an average daily profit of $ 6,800

Over a period of 120 days, the bot was able to increase an initial amount from 14 ethers to 218.5 ethers, which is currently valued at $ 813,694.

That adds up to an average daily profit of about $ 6,800, before adding in the cost of spamming the network.

In response to the spammer, the team behind Polygon finally decided to increase the minimum cost of a transaction from 1 gwei to 30 gwei to fight spam and improve network health.

The move appears to have achieved its intended goal, as data from Delphi Digital shows that the increase in average transaction costs was accompanied by a significant decrease in the number of daily transactions, as it now costs $ 30,000 to keep the network on for a full day spam.

Average gas cost of Polygon versus daily number of transactions. Source: Delphi Digital

Network data shows that spam transactions fell from 2 million to 500,000 transactions per day, a 75% decrease, but they still account for 16.7% of daily transactions. This means that the bots are spending about $ 5,000 of their daily profit of $ 6,800 on gasoline to keep the program going.

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