Smart Contract Vulnerabilities Unveiled: Sandwich Attack

In decentralized finance (DeFi) and blockchain applications, the order in which transactions are executed can significantly impact the results of a trade. A “sandwich attack” is a form of front-running attack where an attacker manipulates the price of an asset by placing transactions immediately before and after a victim’s trade. In this article, we’ll explore what a sandwich attack is, provide examples of how it works, and explain how to mitigate this vulnerability.

Sandwich Attack

What is a Sandwich Attack?

A sandwich attack involves three key transactions:

1. The attacker observes a pending transaction from a user.
2. The attacker places a buy transaction immediately before the user’s transaction to inflate the price of the asset.
3. After the user’s transaction is executed, the attacker places a sell transaction to profit from the increased price, essentially “sandwiching” the user’s transaction between their two trades.

This allows the attacker to manipulate the asset’s price and profit from the user’s trade without their knowledge.

Vulnerable Code Example

Here is an example of a vulnerable smart contract that could be exploited in a sandwich…