First Steps in DeFi: Identifying and Avoiding Sandwich Attacks

📖 “Sandwich Attacks in DeFi: A Beginner’s Guide” is a comprehensive article explaining the concept of sandwich attacks in decentralized finance (DeFi) and how to avoid them. 🌐 DeFi, using blockchain technology, offers financial services like lending, borrowing, and trading without traditional intermediaries. However, it’s vulnerable to sandwich attacks, where attackers manipulate token prices to profit from trades.

🔍 Factors enabling these attacks include blockchain transparency, gas fees, and price slippage in liquidity pools. Attackers observe the mempool for pending transactions, then strategically place trades to alter token prices.

💸 A notorious example was the $EWT attack on Uniswap, where a user lost significant funds. Overall, sandwich attacks have siphoned over $20 million from DeFi users, making up a significant portion of total transaction fees.

🛡️ To counter these attacks, users can adopt strategies like using limit and stop-loss orders, selecting DEXs with better price oracles, and utilizing privacy tools that conceal trade details. Prominent DeFi projects like Uniswap and SushiSwap are susceptible but are actively improving security measures.

🚀 The article emphasizes the importance of being informed and cautious while engaging in DeFi transactions. Understanding and implementing these protective strategies can safeguard against potential losses due to sandwich attacks. 🛡️🔐📈

To dive deeper, check out the complete article:
https://droomdroom.com/guide-to-sandwich-attacks/