The recent Curve Finance exploit has resulted in one of the largest-ever recorded maximal extractable value (MEV) rewards, totaling 584.05 Ether (ETH).

On July 31, Ethereum core developer “eric.eth” reported that the blockchain had witnessed some of its largest MEV reward blocks in history. The surge was attributed to the exploit of Curve Finance’s stablecoin pools, which occurred on July 30.

While this reward block is substantial, data indicates that a larger MEV reward of 692 ETH was logged earlier in March.

To explain how this works, “eric.eth” outlined the process: “A bot detects a hack attempt in the mempool, replicates the transaction, and preempts it,” he said. “In doing so, they pay a premium to the block producer in ETH to ensure their transaction is prioritized.”

What Are MEV Bots?

An MEV bot is a tool designed to extract additional profit by strategically reordering or inserting transactions within a block. This allows the bot to capitalize on arbitrage opportunities and potentially profit from market inefficiencies.

These bots can also spot transactions at risk of liquidation, allowing them to front-run those events and acquire liquidated assets at discounted prices before anyone else.

Validators proposing new blocks can outsource their block production to specialized entities that focus on extracting MEV revenue. In exchange, these entities share a portion of the rewards with the validator for allowing them to front-run certain transactions.

This process generates what’s known as the “block reward.” In the past few hours, several large MEV rewards have been recorded, with the highest being 584.05 ETH—worth approximately $1 million—confirmed at 1:34 am UTC on July 31, according to data from Beaconcha.in. Additional rewards were also logged, including 345 ETH and 247 ETH blocks.

Ethical Concerns

The surge in MEV rewards raises ethical questions, particularly regarding the use of potentially ill-gotten funds to pay validators for allowing front-running. Some have raised concerns that these rewards may come from hacked funds, casting a shadow over the morality of such transactions.

One tweet pointed out, “This is where the ethics of MEV rewards going to miners gets questionable. These are effectively hacked funds.”

In April, a “Subway-themed” trading bot made millions through MEV by employing “sandwich attacks” during the memecoin trading frenzy.