Here’s another Airdrop – Be careful, bots don’t steal your Ethereum

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Trading bots mined hundreds of Ethereum from the WTF/WETH liquidity pool on Uniswap. The fees.wtf team failed to provide enough liquidity to the pool, which made it easy for the bots to manipulate the price of the WTF token. Many crypto users have expressed their displeasure with the way the airdrop was handled. Share this article

Trading bots battled to take care of each other’s WTF token trades after fees.wtf airdropped early on Friday. Some bots have run away with thousands of dollars in profits, and many early traders have been caught in the crossfire.

Bots Attack fees.wtf Airdrop

The fees.wtf airdrop discovered the ruthless world of botting on Ethereum.

fees.wtf, a site that allows Ethereum users to check how much gas they have spent on transactions, began its highly anticipated token airdrop on Friday morning. Ethereum users were awarded WTF tokens based on the amount of gas they spent on transactions and the number of failed transactions they experienced.

The airdrop followed several similar distributions of Ethereum tokens over the past few weeks. On Christmas Eve, OpenDAO dropped its SOS token to OpenSea NFT traders. Following this, Gas DAO and LooksRare launched their tokens in quick succession. However, while the developers of previous airdrops ensured that their trading pools were filled with enough liquidity to facilitate trades, it appears that fees.wtf did not.

According to data from Etherscan, the initial liquidity provided to the WTF/WETH pool on Uniswap only totaled 2,211 WTF and 0.000001 WETH. As soon as the pool was set up, trading bots kicked in, depleting liquidity and driving up the price of the WTF token. The following bots that attempted to drain liquidity ended up paying large amounts of Ethereum for smaller and smaller amounts of WTF tokens.

Chart showing the highest prices paid by users for WTF tokens. (Source: @Substreight)

While some of these trades were sandwich attacks from advanced MEV bots, some also appear to be from traders caught in extreme slippages and bots that were too slow to extract liquidity. Users who were unfamiliar with Uniswap’s advanced features sent transactions with 95-99% slippage, meaning they received only a fraction of what they expected. the transaction due to the low liquidity of the pool.

A bot mined 58 ETH from the liquidity pool by first buying all the remaining WTF tokens in the pool on its first trade, only to resell them at nearly six times the price it paid. The bot was able to do this by paying around $2,854 in gas to ensure its transactions would be processed before anyone else’s.

Another bot spent 850 ETH to buy 97 WTF tokens, putting the price per token at over $28,600. However, like the previous bot, this trade was part of a complex MEV strategy, which ended up earning the bot a net profit of 0.08 ETH after taking gas fees into account.

As the trading bots battled through the low liquidity WTF/WETH pool, it is highly likely that other individual traders found themselves caught in the crossfire. The on-chain data shows multiple transactions of users attempting to cash out large amounts of airdropped WTF tokens only to receive Ethereum pennies in return.

Trade $12,855 WTF for about $0.07 in WETH, with a gas fee of $450. (Source: Etherscan)

Due to severe liquidity issues caused by trading bots, many crypto enthusiasts have taken to Twitter to criticize fees.wtf. In response, the project’s developers posted an assessment of the situation on Discord, assuring the server’s 73,000 members that smart contracts had not been exploited and that liquidity issues were tied to Uniswap. However, many Discord members criticized the decision to launch the WTF/WETH pool with such a low level of liquidity, which makes it extremely easy for bots to manipulate the pool.

In the lead up to the airdrop, the fees.wtf team announced that there will be a 0.01 ETH fee for claiming the WTF token airdrop in addition to the gas fee. Users could generate referral codes on the fees.wtf website, and they would receive half the fee if another user claimed to use their code. The developers explained on Discord that they set up the fee to “help make wtf go viral” and so “the team doesn’t have to take a huge allocation of wtf tokens”.

fees.wtf also raised eyebrows after withdrawing 150 Ethereum from Binance last week after accepting donations to the project. Interestingly, the bots would have had a harder time taking advantage of the low liquidity if the 150 Ethereum had been added to the pool before it launched. fees.wtf has not yet commented on the issue.

Reviewers criticized fees.wtf for its handling of airdrop. A Twitter user operating under the handle @levels_crypto described the WTF token as a “ponzi”. The fees.wtf Discord server is also littered with complaints, with many members alleging they were banned by the team after asking questions about Binance’s withdrawal.

It’s also worth noting that the airdrop was supposed to provide a makeshift discount for gas fees that users had previously paid to use Ethereum, but the drop itself drove gas fees to absurd levels, resulting in the burning of Ethereum worth over $7.6 million. the process. “Ironic,” notes the fees.wtf Twitter account in reference to the high levels of gas consumption.

The WTF token is currently trading at $0.09. According to fees.wtf, the average amount of tokens awarded is around 275 WTF. At current prices, the gas charge to claim 275 tokens would far exceed their market value.

Disclosure: At the time of writing this article, the author owned ETH and several other cryptocurrencies. He was also eligible for the Fees.wtf airdrop.

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