Curve Finance Exploit Generates 584.05 ETH Block

The recent exploit at Curve Finance reportedly resulted in one of the largest maximal extractable value (MEV) reward blocks in history, with 584.05 ETH  allocated.

The Ethereum core developer “eric.eth” reported on July 31 that “today has produced some of the largest MEV reward blocks in Ethereum’s history,” adding that the exploit of Curve Finance stable pools on July 30 was to blame.

March saw a larger MEV reward block of 692 ETH, according to data. “A bot detects an incoming hack in the mempool, replicates the transaction, and front-runs it,” he explained, adding, “To do so, they pay the block producer a significant amount of ETH to be first in line.”

A MEV program is intended to generate additional revenue by reordering and/or inserting transactions into an otherwise normal block in order to create arbitrage opportunities.

MEV algorithms can also detect impending liquidation transactions and front-run them to acquire discounted liquidated assets first.

The validator is permitted to propose a block using a relay that outsources block production to entities with expertise in extracting this additional revenue.

In exchange for enabling the MEV machine to front-run the transaction, they will receive a portion of this revenue. This is known as the “block reward,” and in the past few hours, some enormous ones have been recorded.

According to Beaconcha.in, the highest MEV bot block reward was 584.05 ETH, valued at approximately $1 million, which was confirmed at 1.34 am UTC on July 31.

During this time, there were also block rewards for 345 ETH and 247 ETH. In response to the tweet and the implications of potentially illicit funds being used to pay validators to enable the front-running of transactions, moral concerns were expressed.

“And this is where the morality of MEV rewards going to miners gets pretty shady. These are effectively hacked funds.”

Using “sandwich attacks” during the memecoin trading frenzy, a Subway-themed trading bot generated millions in extractable value in April.