How do sandwich attack bots impact the liquidity and stability of cryptocurrency markets?

3 answers

• FatRahFeb 09, 2024 · 2 years ago
  Sandwich attack bots have a significant impact on the liquidity and stability of cryptocurrency markets. These bots are designed to manipulate the order book by placing large buy and sell orders on both sides of a target order. This creates a sandwich effect, where the target order gets executed at an unfavorable price. As a result, it becomes difficult for traders to execute their orders at fair prices, leading to decreased liquidity and increased price volatility in the market. Additionally, sandwich attack bots can also create a sense of market manipulation and erode investor confidence, further impacting the stability of cryptocurrency markets.
  656

  328
• hrnyoNov 06, 2023 · 2 years ago
  Sandwich attack bots are a real pain in the neck for cryptocurrency markets. These sneaky bots manipulate the order book by placing large orders on both sides of a target order, causing the price to move in their favor. This makes it difficult for regular traders to get a fair deal and leads to decreased liquidity in the market. The increased price volatility caused by these bots can also scare away potential investors, further destabilizing the market. It's a vicious cycle that needs to be addressed by exchanges and regulators to ensure a fair and stable trading environment.
  582

  194
• Schulz HoweAug 16, 2021 · 4 years ago
  Sandwich attack bots can have a detrimental impact on the liquidity and stability of cryptocurrency markets. These bots exploit the vulnerability of the order book by placing large buy and sell orders around a target order. This manipulation creates artificial price movements and makes it harder for traders to execute their orders at desired prices. The decreased liquidity resulting from these attacks can lead to increased slippage and higher transaction costs. It's crucial for exchanges to implement robust security measures to detect and prevent such attacks in order to maintain a healthy and stable trading environment.
  628

  157