As per the recent development, the Curve Finance exploit has led to one of the largest MEV reward blocks of approximately 584.05 Ethereum (ETH). Just recently, a core Ethereum developer stated that the generated block was the second largest in history, falling behind a greater block reward of 692 ETH generated back in March this year. The developer explained that the bot notices an incoming hack in the mempool, reproduces the transaction, and then front-runs it. Before doing so, the bots must pay the block producer a greater sum of ETH to be on the front line.
Today has produced some of the largest MEV reward blocks in Ethereum’s history.
Slot 6,992,273: 584 ETH
Slot 6,993,342: 345 ETH
Slot 6,992,050: 247 ETH
Slot 6,993,346: 51 ETH
— eric.eth (@econoar) July 30, 2023
MEV bots are developed to generate additional revenue by either reordering or inserting transactions in a certain block to generate arbitrage opportunities. At the same time, Ethereum ensured that these MEV bots are also able to see pending liquidation assets and front-run them to buy the liquidated assets first, but at a hefty discount. The validator is offered the opportunity to propose a block via a relay that mainly outsources its block production to external entities that are increasingly specialized in extracting the potential extra revenue.
As soon as everything’s done, these external entities are offered a specific cut of this revenue in exchange for allowing the MEV bots to front-run the transaction. The entire process can be defined as being a block reward, and greater ones have been seen within the span of the previous few hours.
Ethereum MEV Block Rewards on the Rise
Not too long after the exploit of Curve Finance, on-chain analytics have identified a surge in the creation of additional MEV block rewards. The greatest one created so far is currently valued at approximately $1M depending on the ongoing trading price. At the same time, additional block rewards are almost 345 ETH or 247 ETH.
The sudden increase in MEV block rewards led to a considerable number of people questioning the implications of illicit funds being paid to validators to allow the front-running of various transactions. Most people claim that the funds being offered to these validators are undoubtedly hacked and stolen funds. Just recently in April this year, a subway-themed trading bot made millions and got away with it via the active use of sandwich attacks.