Concerns Arise for BNB as MEV Bots and Sandwich Attacks Increase
In recent days, the Binance Smart Chain (BNB) network has experienced significant volatility, driven by market sentiment and legal challenges faced by Binance.
Despite these factors, overall activity on the BNB network has remained stable.
Surge of Network Activity
The spike in activity on the BNB network has been linked to the presence of MEV bots and sandwich attacks. This was highlighted in a recent post by crypto analyst hildobby.
Data indicates that BNB has seen a notable increase in sandwich attacks due to the competitive MEV environment of Ethereum.
As of the latest data, there has been a weekly volume of $1 billion, accounting for 14% of the total volume, affecting 35,000 victims weekly (4.6% of traders), and involving 215,000 transactions per week (4% of total transactions).
MEV bots are automated tools that exploit the execution sequence of orders on blockchain networks to maximize profits for miners.
Meanwhile, sandwich attacks involve strategically placing buy and sell orders around a target transaction to manipulate its execution price, typically benefiting the attacker at the expense of other traders.
Potential Implications
The rise in such activities, stemming from Ethereum’s competitive MEV landscape, brings forth various concerns.
Primarily, the high volume of transactions could lead to increased network congestion, causing delays in transaction confirmations and higher fees, which could impact user satisfaction.
Moreover, the growing number of victims raises security and trust issues within the BNB network. Users affected by sandwich attacks may suffer financial losses, potentially eroding trust in the network.
Additionally, the significant number of transactions linked to sandwich activity poses a risk of overwhelming the network’s capacity, potentially hindering the scalability and efficiency of BNB transactions.
Focusing on the Positive
On a brighter note, the revenue generated by the BNB protocol has increased by 25% over the past month.
Furthermore, there has been a surge in development activity on the network, with Token Terminal’s data showing an 80% increase in code commits for the BNB network in the last 24 hours.