An arbitrage bot called printMoney has been exploited, resulting in a loss exceeding $2 million in cryptocurrency, according to on-chain security tracker PeckShieldAlert. This incident underscores the risks associated with fully on-chain arbitrage bots within permissionless environments like the BNB Chain.
Arbitrage bots are automated trading systems designed to capitalize on price differences across exchanges or liquidity pools. On-chain versions operate directly within smart contract protocols on decentralized exchanges such as PancakeSwap and Venus. While useful, these bots are vulnerable since their trading strategies and possible weaknesses are transparent and exploitable by attackers.
The exploit affected multiple assets held by the compromised wallet, with total losses exceeding $11 million in stablecoins and hundreds of thousands more in wrapped tokens. This suggests a systematic attack potentially leveraging a smart contract vulnerability or misconfigured permissions within the bot’s arbitrage operations.
One major weakness of on-chain bots is their operational security. To execute trades rapidly, bots often maintain large fund balances, making them attractive targets. Insufficiently audited smart contracts may expose bots to manipulation of liquidity pools, the creation of false arbitrage scenarios, or abuse of callback functions.
Additionally, centralized fund management presents risks. Many arbitrage bots pool user funds to reduce capital needs, creating single points of failure. A successful attack on such a bot endangers all aggregated assets.
This incident serves as a caution for both investors and developers using on-chain automated trading tools. Since blockchain activity is transparent, bots without robust security measures are vulnerable to exploitation.