The Ethereum Foundation, the organization leading the development of this blockchain, made a fresh sale of ETH in exchange for millions of dollars. This time, the organization was the victim of the vicious fees market structure ruling transactions on the network.
Ethereum Foundation Victim Of This Attack
According to crypto journalist Colin Wu, an attacker extracted around $10,000 from the Ethereum Foundation. When the organization moved 1,7000 ETH to decentralized exchange (DEX) Uniswap, the transaction was caught up in a “Sandwich Attack.”
Conducted by a Maximal Extractable Value (MEV) bot as part of a strategy to profit from the fees market on the network. These bots front-run other users on the network and exploit the transaction structure by placing two transactions between the one they are trying to “attack.”
In this case, an MEV bot placed two transactions between the Ethereum Foundation’s ETH operation. The first of these transactions is placed after the bot spots the large ETH transfer, and then the entity sends a similar transaction, paying a larger fee and frontrunning the foundation.
Later, the Foundation is forced to pay more for the transaction, directly impacting the price of ETH. The short boost is captured by the second transaction placed by the MEV bot.
As the report stated, the “Sandwich Attack” cost the Ethereum Foundation $9,101, and the attack received around $4,060. Further data provided by Wu indicates that the organization remains one of the largest ETH Whales.
Following their 1,7000 ETH sale, the organization holds over 316,760 ETH worth $500 million. The different addresses associated with the Foundation hold over $550 million in tokens and stablecoins.
Crypto Community Calls Attack “Karma”
The Ethereum Foundation has placed heavy selling pressure on the ETH spot market. Over the past two years, the organization sent similar transactions worth millions of dollars.
When other participants record these transactions, these usually follow suit and increase the selling pressure on the ETH price. Thus often leading to local tops in the price of Ethereum and a persistent downtrend.
As a result, the crypto community frowns upon these transactions. The latest “Sandwich Attack” was not significant in size, but it revealed the hostility present in crypto users. One replied to Wu’s report: “Traditionally, they usually sell before big dumps.”
As of this writing, the ETH price suffers from the short-term effects of the Foundation’s transactions on market sentiment. The cryptocurrency records a
Cover image from Unsplash, chart from Tradingview