Ethereum and Solana are struggling to deal with MEV bot. Amid this, could Injective Protocol (INJ) be the safe haven against sandwiching?
When looking at the bigger picture, Ethereum and Solana could be two of the biggest innovative platforms in the crypto world. The only problem is, just like most open systems, transacting can mean getting wreaked.
How to lose money fast MEV bot on $NPC getting crazy pic.twitter.com/RobpooVstB
— Johnny Fap (@cryptojohnnyfap) June 12, 2024
The Problem: MEV Bots Are Actively Extracting Value
Bots are marauding, and they don’t mean well for you.
For those who are unaware or might have been impacted by Miner Extractable Value (MEV), the result is clear: There are sharks, and they are ready to “kill.”
While MEV bots exist, they are increasingly more prevalent on Solana than Ethereum.
On Ethereum, the world’s highest gas fees are a barrier to entry for MEV bots. Only those heavily backed can operate profitably.
Solana, on the other hand, utilizes a similar system but with near-zero fees. This “welcomed feature” has created a free-for-all for MEV bots, raising concerns about fairness and security.
The situation became so dire that the Solana Foundation recently banned over 30 validators for allegedly enabling MEV activity.
The question now remains? Is there a safe space for users to deploy smart contracts or trade without getting sandwiched?
As it turns out, Injective Protocol stands out as a beacon of hope. Like Bitcoin, Injective boasts complete MEV resistance.
This achievement is particularly intriguing considering that Injective, like Ethereum, also has a transaction mempool—a common element associated with MEV exploitation.
Unpacking INJ: Is Injective Protocol A Beacon Of Hope?
So, how does Injective pull off this feat? The answer lies in its Frequent Batch Auction (FBA) system.
In a post on X, FBA, Injective said, is a decentralized mechanism that tackles MEV head-on while bolstering network security.
1/ 🚀 Injective's native MEV resistance is powered by its innovative Frequent Batch Auction (FBA) system. This decentralized method not only prevents front-running but also enhances overall network security. Let’s explore how this works! 🧵👇
— Injective 🥷 (@injective) June 11, 2024
And how it works is even clearer than day.
To start with, all transactions are batched and processed together at predefined intervals. What this does is that validators don’t have to compete against time when processing transactions and adding them to a block. By removing the race against time, Injective prevents validators and MEV bots from taking advantage of the timing to rip off users.
And this doesn’t stop there. Once batched, all transactions are executed at a single, uniform price. Accordingly, it is impossible to manipulate order prices inside a given batch.
The execution also doesn’t happen just like that. All transactions, Injective said, are sealed until the auction ends. Sealing transactions is a major advantage since it prevents bots on the network from peeking at other orders, allowing them to adjust their own for an unfair edge.
DISCOVER: Like Injective Protocol? You Will Love These Other Projects!
MEV Resistance Because Of DeFi-Focus?
Combining them all, Injective said their network fairly processes orders, tactically dealing with MEV tactics like front-running, back-running, and sandwich attacks.
Innovative as this may sound, Injective, unfortunately, is only a DeFi-focused platform and is way smaller by market cap than Solana and Ethereum.
Since finance is the motive and Injective is by all means preventing exploitation, running MEV bots on the network might not be a lucrative venture.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
