Decentralized trading platform PancakeSwap has announced a partnership with software development company BloXroute to implement protection against the unwanted presence of Mev bots on the Ethereum blockchain.
Mev bots play a key role in Ethereum’s transaction architecture by creating a homogeneous marketplace at the price level, yet they are often the root cause of front-run attacks against the end user.
With this new feature, the user experience should take a huge step forward, going to make the DeFi world more efficient and transparent.
Summary
Ethereum: What are Mev bots?
When talking about the internal structure of Ethereum block validation we cannot avoid mentioning the so-called Mev bots, which play a very important role nowadays.
Without falling into complex terminologies, we can describe these bots as a state-of-the-art technique that exploits the sorting of transactions during the process of block verification by a validator to go speculating on price slippage during trading on DEXs such as PancakeSwap.
The term “MEV” stands for “Maximum Extractable Value” and is intended to represent all those techniques aimed at maximizing the profit of these individuals (who run specialized bots and software) involved in handling transactions on Ethereum from the mempool to the final inclusion within a block.
Front-run attacks are where mev bots are able to profit most: by choosing to include, omit, or reorder certain TXs in a block, the mev can place OWN ORDERS in advance of others and gain from the impact generated on prices at the expense of other users.
Other instances of gain for mevs involve arbitraging the value of an asset across different decentralized markets and liquidating borrows in lending platforms.
All of this harms the experience of the end user who will have to deal with high price slippage and the risk of being frontrunners.
At the same time, the presence of these bots helps marketplaces based on AMM mechanisms to level asset prices across different platforms, avoiding price discrepancies and enabling more efficient lending activity on DeFi.
PancakeSwap and the partnership with bloXroute: a protection against Ethereum mev bots
The decentralized exchange PancakeSwap has found a solution by partnering with the technology company bloXroute to prevent Mev bots from practicing front run attacks against its users on the Ethereum blockchain and BNB chain.
In particular, those who trade cryptocurrencies on the DEX will be able to access bloXroute’s RPCs for free, helping them to get better price execution on their swaps.
These RPCs ensure that TXs sent through them are not visible in the mempool, thus preventing a Mev bot from identifying a profit opportunity and swapping the sorting of a block at will.
In the previous version of MEV Protect RPC on BNB Chain, the protection rate offered by bloXroute on PancakeSwap was 85% while with the latest update, full coverage will be possible.
The feature requires less than a minimum to be enabled on a non-custodial wallet like Metamask and can generate large economic benefits for the end user.
Regarding the news, PancakeSwap’s head chef Mochi stated that:
“PancakeSwap is pleased to work with a leading industry partner bloXroute, to protect our users from MEV activities such as front-running and sandwich attacks. This collaboration aims to maximize the value our users receive.”
For the DeFi world to compete with centralized crypto service providers, it is critical that when a user performs a swap, the process is easy, fast, inexpensive, and with real-time pricing reference.
In and of itself, this niche market presents significant risks related to hacks and exploits of decentralized platforms: if there are not constant improvements in the way individuals approach executing transactions it is safe to assume that decentralized finance will never reach mass adoption.
This partnership between Pancakeswap and bloXroute is precisely aimed at improving the efficiency of DeFi environments and making the user experience more enjoyable.
BloXroute Labs and research in the crypto space
BloXroute represents one of the most prominent blockchain software development companies in the crypto industry with a very strong presence and commitment to the Ethereum ecosystem.
The Chicago-based tech startup aims to take trading on decentralized exchange platforms to another level.
Through its blockchain distribution (BDN) and hyper-connectivity on Ethereum, BNB Chain, Polygon and Solana, the BloXroute team is able to offer low-latency DeFi with protection against Mev and price manipulation.
About 350 trading firms in the decentralized finance world take advantage of BDN infrastructure to get faster and more efficient data that can offer a high inclusion rate and more competitive transaction propagation.
Of note, about 40% of the volume running on Ethereum travels through BloXroute’s relayers and more than 500,000 validators connected to it.
In recent months the company has focused on the world of Mev-bots and devising a solution to prevent sandwich/front-run attacks without damaging the Ethereum ecosystem.
In this regard, during the last ECC in Paris, the Chicago-based company’s CEO, Uri Klarman, presented a solution called “Instant Inclusion Ethereum” (iiETH) that allows for real-time blockchain inclusions of transactions with protection against Mev-attacks.
Below you can find his speech during the conference explaining this innovation:
