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If MetaMask uses Infura as their backend, and Infura cannot watch for events, then how does MetaMask manage it?

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MetaMask examines the logs for each block and filters them locally. Take a look at https://github.com/kumavis/eth-json-rpc-filters and https://github.com/MetaMask/provider-engine for details, though the code can be a bit hard to follow.

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