Intro We have 2 tokens in our project and 3 liquidity pools ( "token1-ETH", "token2-ETH" & "token1-token2"). Token1 has ~5% of fees and includes reflection. Token2 allows users to acquire Token1 for half the fee (compared to direct buy using ETH).
Issue Immediately after launch, we are observing 2 (or so I think) kinds of MEV bots actively attacking our tokens. One of them is a sandwich MEV bot that is wrapping buy and sell around large trades. This one is a nuisance but generates more reflection and not as dangerous. The other one is draining the liquidity pool. It makes huge number of transaction within a single block and is somehow draining the ETH from Token2-ETH liquidity.
Any suggestion on what we can do to protect our users from these MEV bots?
Is there a way to detect MEV bot in solidity contract? Any suggestions on how we can tax the MEV bot higher or block or throttle the number of transaction within a block.
Any help would be greatly appreciated.
I did not share particular details about the contract to avoid making these contracts public and inviting more attacks. I can share these details if required. I have the transaction hashes of these attacks.