The Complete Guide to Blockchain Clipper Bots: From Principles to Practice

In the rapid development of decentralized exchanges (DEX), the MEV (Maximum Extractable Value) mechanism has given rise to a class of efficient automated trading tools—sandwich bots. These programs extract considerable value from the market by reordering, inserting, or controlling the execution sequence of transactions. This article will deeply analyze the working mechanisms, technical implementations, and practical applications of sandwich bots to help you comprehensively understand this key player in the crypto ecosystem.

What are MEV and Sandwich Bots

MEV (Maximum Extractable Value) is a core concept in blockchain networks. In smart contract and DEX trading, miners (or validators) and participants can earn additional profits by reordering, inserting, or deleting transactions. Sandwich bots are a direct application of this mechanism; they monitor pending on-chain transactions in real-time, leveraging the flexibility of transaction ordering to quickly execute their own trades before and after user transactions, capturing the price difference.

Simply put, sandwich bots are like high-speed market intermediaries that can identify market opportunities within milliseconds and complete operations before users notice. This capability makes them among the most controversial yet efficient trading tools in the DeFi ecosystem.

Full Analysis of Six Types of Sandwich Bot Tools

As the market evolves, different strategies of sandwich bots have emerged, each optimized for specific market scenarios.

First-tier Sandwich Bots position themselves at the top of the hierarchy by monitoring large orders in the transaction pool and submitting transactions with higher Gas fees to get ahead. When a user’s order is executed and causes a price movement, the bot immediately performs a reverse operation to profit. This is the most common type of sandwich bot.

Arbitrage Bots Across Exchanges focus on exploiting price differences between different trading platforms. They buy assets at a low price on one DEX and sell at a higher price on another, quickly identifying and executing trades to earn profits. These tools rely heavily on market liquidity and real-time price data.

New Token Launch Bots target the high volatility during the initial phase of a new token listing. When a new token goes live on a DEX, its price is often highly unstable. These sandwich bots swiftly buy in, wait for the price to rise, then sell immediately to earn early liquidity dividends.

Liquidity Pool Arbitrage Bots profit by transferring assets between different liquidity pools. They identify price discrepancies across pools and perform arbitrage through providing and withdrawing liquidity. This strategy demands high precision in pool depth and real-time data.

Flash Loan Arbitrage Bots utilize flash loans’ zero-collateral feature to manipulate large trades over short periods. The bot borrows a huge amount of funds in a single transaction, pushes up the price of a pool, then profits from the price difference in another pool before repaying the loan. These bots have higher entry barriers but offer significant profit potential.

Triangular Arbitrage Bots perform cyclical arbitrage across three token pairs. For example, through sequential trades of A/B, B/C, and C/A, they exploit mismatched exchange rates. This strategy requires high computational power and execution speed.

How Do Sandwich Bots Work

Sandwich bots are the most representative form of sandwich trading. They create a “sandwich” structure—placing one transaction before and one after the user’s transaction—effectively “wrapping” the user’s trade to capture the price difference.

The core advantage of these bots lies in high efficiency and speed. They can detect on-chain trading opportunities within milliseconds and seize the trading edge. This rapid response is typically achieved through three optimizations: using high-performance blockchain node services, dynamically adjusting Gas prices, and efficient smart contract interactions.

Operating a sandwich bot involves continuous on-chain monitoring, meaning it must maintain real-time connections to blockchain nodes to capture each pending transaction. Any delay could result in missed opportunities, so node selection (such as using ZAN, Infura, or Alchemy’s high-performance services) directly impacts success rates.

Front-running and Back-running: The Dual Strategies of Sandwich Bots

Sandwich bots employ two core profit strategies: front-running and back-running.

Front-running involves the bot detecting a pending buy order from another user but before it gets included in a block, the bot buys the target token at a lower price. When the user’s order executes and pushes the price up, the bot quickly sells, earning the spread. This requires precise judgment of the user’s actual trading volume and accurate prediction of the impact on the trading pair’s price.

Back-running operates in reverse: the bot sells at a higher price before the user’s sell order executes. When the user’s sell order pushes the price down, the bot buys back at a lower price, profiting from the difference. This strategy is especially effective during market downturns or large user sell-offs.

Both strategies share a common point: sandwich bots act as market intermediaries, controlling transaction order to turn user transaction costs into their own profits. The profits that would normally belong to DEX liquidity providers are captured by these bots through priority in transaction execution. This is why sandwich bots are both popular (due to efficiency) and controversial (because they increase user transaction costs).

Building Your Own Sandwich Bot: Technical Implementation Path

To technically implement a basic sandwich bot, the following core steps are necessary:

Step 1: Real-time Transaction Monitoring. Establish a WebSocket connection to a blockchain node to continuously listen for pending transactions. This can be achieved via WebSocket endpoints provided by ZAN or other node service providers: