Uniswap user lost $700k after amid liquidity pool error

A Uniswap user who created a liquidity pool lost more than $700,000 in seconds after an influx of MEV bots, likely due to a configuration error.

The user created the WBTC-CRV liquidity pool on the Uniswap v3 platform. He then deposited $1.56 million worth of Wrapped Bitcoins (WBTC).

Somebody just lost $700K in 12 seconds thanks to MEV Bots.

0x568 was a large LP who entered the wrong values while creating a new WBTC-CRV pool on Uniswap v3 – and ended up adding $1.5M of liquidity far above fair market price. pic.twitter.com/0KYWq5t305

— Arkham (@ArkhamIntel) November 4, 2023

In exchange, he received 1.56 million in CRV, worth $850,000 at that time. The transaction attracted the attention of MEV bots, focused on maximizing profits by shuffling transactions in the block.

MEV Bots instantly rushed the pool to swap CRV for valuable WBTC – with the first bot making off with $1.36M in WBTC for only $730K in CRV.

But the bot only netted ~$260, paying $527K of ETH to the validator just to make this transaction.

Tough luck! pic.twitter.com/3JbVwhwYoj

— Arkham (@ArkhamIntel) November 4, 2023

They tried to exchange CRV for WBTC urgently. One of the bots managed to convert 1.36 million in CRV to 39.01 WBTC, Arkham Intelligence notes. For the priority of the transaction, he paid the validator $527,000. His bonus was about $260.

In September, Alchemix Finance thanked an anonymous MEV bot operator for voluntarily returning $70k, or 43.3 Ethereum (ETH), in arbitrage profits from the Curve Finance exploit.

MEV bot operator has returned 43.3 ETH of profits while operating Curve Finance, a decentralized stablecoin (DEX) exchange.

Alchemix Finance, one of the four protocols directly affected by the Curve incident, confirmed the transaction on Sept. 4. The Miner Extractable Value (MEV) bot operator has returned 43.3 ETH of profits while operating Curve Finance, a decentralized exchange.