Sandwich Attack in DeFi: How It Works and How to Defend

When navigating Sandwich Attack, a front‑running technique that targets trades on automated market maker (AMM) platforms by inserting a buy order before the victim and a sell order right after, capturing the price shift. Also known as MEV sandwich, it leverages the same mechanics that power Front‑Running and thrives on the latency of transaction ordering. In simple terms, the attacker squeezes your trade between two of their own, hence the name.

Key Concepts Behind Sandwich Attacks

The first building block is the Automated Market Maker (AMM). AMMs price assets based on a constant‑product formula, so a sizable buy order instantly pushes the price up. A sandwich attacker watches the mempool, spots a large pending swap, and quickly places a smaller buy that moves the price just enough to profit from the victim’s larger trade. After the victim’s transaction goes through, the attacker sells the acquired tokens at the new, higher price. This sequence forms a classic sandwich attack triple: Sandwich Attack → exploits → AMM price impact.

Second, the broader ecosystem of MEV (Miner Extractable Value) provides the economic incentive. MEV captures any profit that can be extracted from ordering, including inserting, censoring, or reordering transactions. Sandwich attacks are a subset of MEV because they rely on the miner or validator’s willingness to place the attacker’s orders ahead of the victim’s. The relationship can be expressed as: MEV → includes → Sandwich Attack. Understanding this link helps traders recognize why some chains with high MEV activity see more aggressive front‑running.

A third piece of the puzzle is Liquidity Provision. Pools with shallow depth are especially vulnerable because a modest trade can cause a large price swing. Liquidity providers (LPs) often notice sandwich attacks because the pool’s balance changes dramatically in a short window, which can trigger impermanent loss. The connection is simple: Shallow Liquidity → enhances → Sandwich Attack profitability. This is why many DeFi projects now encourage deeper pools or introduce slippage controls.

So, how can you protect yourself? The first line of defense is setting tighter slippage tolerances on your swaps. If the price moves beyond your limit, the transaction reverts, denying the attacker a profit. Second, using private transaction relays or batchers hides your trade until it is confirmed, reducing the chance of being spotted in the mempool. Third, some protocols offer “anti‑sandwich” mechanisms, such as randomized order execution or integration with MEV‑resistant block builders. These tactics collectively raise the cost for attackers and often break the sandwich attack chain of events.

Finally, keep an eye on on‑chain analytics tools that flag abnormal trade patterns. Sudden spikes in buy‑sell volume right before a large swap are a red flag. By monitoring these signals, you can adjust your strategy in real time—either pulling back or splitting your trade into smaller chunks. The landscape of DeFi is fast‑moving, and staying aware of how sandwich attacks intersect with AMMs, MEV, and liquidity depth is the best way to keep your profits safe.

Below you’ll find a curated set of posts that dive deeper into each of these angles—whether you want to understand the math behind AMM pricing, explore MEV extraction tools, or learn practical steps to safeguard your swaps.