Ross Ulbricht, the digital black market Silk Road’s founder, has recently experienced a massive loss. As per Lookonchain, Ross Ulbricht has lost up to $1.77M in $ROSS tokens because of a miscalculation in the process of liquidity provision. The on-chain analytics platform disclosed this incident on social media.
Silk Road Founder Loses 400M $ROSS Because of Error in Liquidity Provision for Raydium Pool
Lookonchain pointed out that Ross Ulbricht accidentally lost a huge amount of 400M $ROSS tokens. Hence, due to a mistake in the liquidity provision procedure, he reportedly lost nearly $1.77M. Particularly, the error took place in the liquidity provision for the Raydium pool. An arbitrage opportunity emerged when the mistake was at once detected and leveraged by a Maximal Extractable Value bot.
The above-mentioned MEV bot spent just 2.3 $SOL (almost $556) to buy 398.6M $ROSS. In this respect, the bot obtained the tokens at a considerably discounted price. Subsequently, the bot also cashed out an enormous profit by offloading the respective amount. It reportedly resold those tokens for nearly 2,669 $SOL, accounting for approximately $643,500.
Incident Underscores Requirement for Improved Liquidity Management in DEXs
According to Lookonchain, the MEV bot successfully made a noteworthy profit of $643K by leveraging Ross Ulbricht’s liquidity miscalculation. The incident points toward the risks dealing with the management of liquidity in the DEXs, particularly in interaction with Raydium and other automated market makers. Keeping in view, MEV bots can frequently capitalize on such errors.
