Frequently Asked Questions
A crypto sandwich bot is an automated tool that profits from transaction timing on decentralized exchanges. It places buy orders before large pending transactions and sell orders afterward to capture the price movement caused by those trades.
The bot monitors the blockchain's mempool for large transactions. It buys a token before the big transaction occurs and sells it after, making a profit from the price swing triggered by the large trade.
While traditional bots use market data and indicators, sandwich bots focus specifically on pending transactions in the mempool, executing trades to profit from the timing and order of those transactions.
Benefits include 24/7 operation, faster trade execution, detection of opportunities that humans might miss, and emotion-free decision-making, making the bot highly efficient in capitalizing on market movements.
The profit a bot can make by affecting transaction ordering is known as MEV. Sandwich bots exploit MEV by positioning their trades before and after large pending transactions to extract value from the resulting price change.
