An unidentified user has just paid a whopping 93.1 ETH (approximately $113,000) in transaction fees to execute six transactions. According to blockchain explorer Etherscan, the transaction was executed by an MEV bot.
What is MEV?
MEV stands for Maximal Extractable Value. It is simply the highest amount that can be extracted by miners or validators by prioritizing some transactions over others within a block.
Blockchain developers, commonly called searchers in this case, program codes called MEV bots to exploit user transactions on decentralized exchanges (DEXes). These bots are used as tools to scan for profitable swap transactions that they can front-run for profits, like arbitrage opportunities.
Once found, the bots front-run these transactions by pushing them forward to get confirmed faster by the miners or network validators.
In most cases, the confirmation is accompanied by expensive transaction fees, like incentives for validators or miners. The higher the fee, the faster the transaction gets confirmed. But then, this occurs at the expense of the average user trying to place the trade on the DEX.
93 ETH Get Spent on Fees
Six transactions were achieved with the MEV bot. 0.244 Wrapped ETH was swapped for 35,702 MCDEX tokens. The MCDEX tokens were then swapped for about 235 million SPELL tokens and finally swapped for 93.1 wETH. In the process, decentralized exchanges Uniswap, 0x Protocol, and SushiSwap were used.
With the MEV bot, the searcher was able to raise $116,300 worth of wETH from only $296 worth of wETH. Excluding the transaction fees and capital involved, the searcher had a profit of about $3,400.
This is not the first time that a transaction has involved a hefty fee on the Ethereum blockchain. Coinfomania reported in August that a user spent $350,000 on transaction fees. The transaction consequently failed, with the user losing the amount spent on the fees.
Ethereum Merge and Expensive Fees
It is noteworthy that Ethereum’s recent transition to a proof-of-stake consensus mechanism, called the Merge, does not solve the issue of large transaction fees.
The completion of the Merge is geared towards making Ethereum more energy efficient. With further upgrades to the network, Ethereum seeks to reach the point where transaction fees are minimal. The scaling approach would involve the widespread adoption of layer-2 solutions which in turn reduce the load on the main Ethereum network.
