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VI A trader DeFi reported to have swapped 2 million USDC Fort USDT, but only get 0.05 . in the end USDT. The incident happened on March 11, during the height of recent market turmoil.
#DeFi Trader Loses $2 Million $USDC This Morning Due to MEV Trade Jam @azcoinnews https://t.co/nRilKew8H5
March 11, 2023
According to the report, the trader made sswap through a series of transactions, starting with the conversion of 3Crv to USDC before changing USDC take USDT. However, according to the report, this trader's transactions were detected and front-run by MEV (Maximum Extractable Value) bots on the network. Ethereum, resulting in losses as shown below.
Source: @spreekaw
The case highlights the ongoing risks associated with decentralized financial transactions (DeFi), especially since MEV attacks are increasingly common. MEV refers to the value that miners or bots can extract through reordering transactions, front-runs, and other similar tactics. When the market DeFi continues to grow, so does the likelihood of MEV attacks, leaving investors vulnerable to significant losses.
This news comes out when Circle, issuer of USDC stablecoins, revealed that $3.3 billion worth of USDC reserves are still sitting at SVB, amid concerns about the bank's solvency. In spite of Circle assured investors that their USDC holdings remain safe and that the company has implemented additional safeguards to ward off potential risks, but the news has raised questions about stability of stablecoins and their basic reserves.
As the DeFi market continues to grow and mature, it is important for investors to be aware of the risks involved in trading these assets. While decentralized finance offers a promising new frontier for financial innovation and investment, it also comes with unparalleled risks and challenges that need to be carefully considered. Still the age old advice, investors should exercise caution and conduct thorough research before investing in any asset. DeFi any.
