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Bots Are Overrunning Crypto Networks Like Solana as They Hunt for Profits

After conquering the Ethereum ecosystem, crypto trading bots are roaming — and causing havoc on — younger blockchains.

Troubles caused by bots signal DeFi has a long way to go before the underlying infrastructure meets the needs of professionals.

Troubles caused by bots signal DeFi has a long way to go before the underlying infrastructure meets the needs of professionals.

Illustration by Jaci Kessler Lubliner, Getty Images (7)

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Deploying funny-sounding strategies like “sandwich trading,” bots have conquered much of the market for Ethereum-based digital tokens, scooping up hundreds of millions — if not billions — of dollars in trading profits over the years. Along the way, they’ve made enemies by front-running others’ transactions, something blockchain-fueled trading fundamentally permits. There’s been a benefit to the broader industry, too: By acting like old-school arbitrageurs, bots have made the Ethereum ecosystem more efficient, reducing price dislocations by methodically buying low and selling high, over and over and over.

They’ve been so successful, in fact, that it’s harder for bot-deploying traders to make money on their original turf in Ethereum. So the bots are searching elsewhere, causing havoc on nascent blockchains in the process. They’ve overrun market infrastructure that couldn’t handle the incredibly brisk pace of their trading. As crypto prices cratered in recent weeks, so-called liquidation bots bogged down Solana, a blockchain favored by many finance pros, when they overloaded it by sending more than 2 million transactions a second. And back in September, Solana was taken completely offline for 17 hours by bot activity.