Original title: How We Made +$50M Sniping Shitcoins On DEXs
Original author: CBB, crypto KOL
Original translation by Luffy, Foresight News
August 2020. My brother teaches information technology at university, and I have just finished an 18-month job as a product manager at an insurance company.
The cryptocurrency industry has emerged from years of slump and is slowly recovering from the crash triggered by the COVID-19 pandemic. We made a few small profits on Binance Launchpad, but our portfolio's total value is barely $50,000.
Around this time, we started hearing about a new protocol called Uniswap. Friends were trading altcoins on it, often making 3-4 times their initial investment within hours. We had absolutely no idea what it was, but our intuition told us it was something special.
A friend was talking to me about "sniping trades." He said that when the bZx token was listed on Uniswap, a bot made $500,000 just by sniping. It was unbelievable. My brother and I were stunned and eager to know how that was done.
At the time, my brother knew nothing about Solidity smart contract language, and we didn't even understand the underlying logic of blockchain.
First sniping attempt
In late August, my family and I were on vacation in Spain. My brother had just started learning Solidity a few days earlier in order to try sniping on Uniswap.
A token called YMPL is about to be listed, and the market seems to be getting pretty good interest. We've formed a raiding team and even pulled in a few friends to pool our funds—after all, we're still newbies and don't want to take on the risk alone.
We invested 50 ETH (worth about $20,000 at the time). As soon as YMPL launched, we successfully targeted 8% of the initial supply. I logged into Uniswap and sold it all in less than 30 minutes.
How much profit? 60 ETH (approximately $30,000). Keep in mind that our entire portfolio at the time was less than $50,000. We were ecstatic at that moment, feeling that making money was so easy.
We want to earn more.
Two days later, a new target emerged: VIDYA. This time, with the profits from the previous round, we had more funds and were more confident. We invested 165 ETH and netted 159 ETH within 15 minutes, even higher than the previous return.
Four days later, another opportunity arose. We invested 460 ETH and profited 353 ETH, equivalent to $135,000. This was the first time we had earned a six-figure profit in less than an hour, and the feeling was simply amazing.
Uniswap's popularity exploded, trading volume soared, and cryptocurrency enthusiasts flocked in. We knew these easy money days wouldn't last. We had to become more professional and truly understand the underlying logic of sniper trading.
What is the principle behind sniping trades?
To issue tokens on Uniswap, a project must first add liquidity to the liquidity pool. In our previous attempts to target Uniswap, we waited for the "liquidity addition" transaction record to be recorded on the blockchain before sending the buy order, which always resulted in a one-block delay.
However, some competitors are able to have their transactions recorded in the same block as those that add liquidity.
After some research, we discovered that by using Ethereum nodes, we can monitor the public mempool and see the transaction information to be processed before the transaction is officially recorded on the blockchain.
Starting in September, our sniping procedure changed to this:
1. Monitor the mempool to capture pending "Add Liquidity" transactions;
2. Immediately send a buy order, setting the same gas fee;
3. The goal is to ensure that buy transactions and liquidity-adding transactions are in the same block and executed immediately afterward.
A New Era of Sniping on Ethereum
Mid-September 2020.
With no new tokens listed for ten consecutive days, this quiet period is perfect for us to upgrade our bot.
But new challenges followed: summer vacation was over, and my brother still had to teach at the university, sometimes sniping opportunities coinciding with his classes. Fortunately, it was during the COVID-19 pandemic, and all courses were conducted online.
Whenever a token is about to be launched, he tells his students, "Take ten minutes to study it yourselves." During this break, he can focus on sniping trades.
Our next target is CHADS. Market enthusiasm is unprecedented; we're prepared to invest 200 ETH, determined to succeed.
My brother and I were on a voice call, feeling both nervous and excited, with immense pressure.
He was the first person to see the "Add Liquidity" trade on the terminal. When the bot detected the signal, he said in a serious tone, "Ça part." (French for "It's starting.")
I'll never forget those words. After that, before every sniping mission, he would say those words in the exact same tone, instantly sending my adrenaline soaring.
Upon hearing this, I frantically refreshed the Etherscan browser, hoping to see our ETH balance cleared to zero—meaning we had successfully entered the market.
We actually bought a position of 200 ETH. The candlestick chart instantly surged, and my task was to manually sell it on Uniswap.
The profits from CHADS were simply astonishing. My hands were shaking violently, I was sweating profusely, and my attention was extremely focused as I sold batch after batch, trying to lock in as much profit as possible.
In the end, we netted 675 ETH (about $270,000). It felt incredible, but the immense pressure and adrenaline also left us exhausted.
There was absolutely no time to rest. Three days later, it was FRONTIER's turn. The same operating procedures, the same tension and excitement, and a profit of 800 ETH.
Two days later was Chartex, with a profit of 700 ETH.
In just six days, we made a total profit of 2,300 ETH, which is simply insane. Just a month ago, after years of struggling in the crypto industry, our total assets had only reached a peak of $100,000.
On September 18th, an unexpected surprise arrived: a Uniswap airdrop. All addresses that had interacted with Uniswap were eligible to receive it.
Because we had been conducting large-scale testing for the past few weeks, we had accumulated a large number of eligible addresses, each capable of receiving approximately $20,000. I remember my brother rummaging through every wallet he could find and withdrawing millions of dollars in total.
That month, our last target was POLS—Polkastarter's platform token, which later became a top launchpad.
Smart Contracts and Infrastructure Upgrades
It's time to upgrade our robots again.
During the first month of the raid, we set a buy limit: invest X ETH and you had to buy at least Y tokens. Under this mechanism, we had to execute multiple transactions, especially since in most cases we had no idea how much liquidity the project team would add.
For example, if the project team only adds 20 ETH of liquidity, and we try to buy it with 200 ETH, the preset price limit will be completely invalidated.
My brother designed a new system: for every 1 ETH invested, at least Y tokens must be purchased; before reaching this price limit, buy as many as you can. We were the first to implement this mechanism.
Another challenge is that we never know whether the project team will use ETH, USDT, or USDC to add liquidity. My brother designed a smart contract to address this, which automatically buys the target token regardless of the trading pair being listed.
We are still working on improving the robot's speed. While the CHADS raid was highly profitable, we were clearly not the first raiders to enter after liquidity was added.
We deployed Ethereum nodes in multiple regions, letting them compete against each other for the right to snipe the same transaction. We quickly discovered that the node deployed in northern Virginia was consistently the fastest.
This leads us to believe that northern Virginia is the best location to run a sniper server.
Further investigation confirmed our suspicions. At the time, almost all users were trading through MetaMask, which routed all "add liquidity" transactions through Infura's public RPC endpoint, and Infura's servers were located in northern Virginia. More broadly, much of the Ethereum infrastructure was concentrated in that region.
Therefore, the Amazon Web Services northern Virginia node proved to be the most competitive and latency-optimized sniper configuration.
We have also developed a very standardized procedure for targeting altcoins:
1. Finding Targets: Usually, 10-15 friends in the crypto community help us discover new, trending altcoins. Whoever finds a target first gets to participate in the raid with 15% of the funds (while also bearing the corresponding risks). Some friends have earned $300,000 to $700,000 just by finding targets.
2. Confirm the decentralized exchanges to be listed (Uniswap, Sushiswap, etc.);
3. Confirm the trading pairs to be listed (ETH, USDT, USDC, etc.);
4. Locate the wallet address responsible for the online setup (on-chain tracking);
5. Deploy the sniper smart contract and set the parameters: capital size and buy limit price;
6. Sell immediately after listing, usually within 30 minutes—because most altcoins are garbage.
Polkastarter era
From October to early December, the market was relatively calm. The pace of new token launches slowed down, and we even thought at one point that the era of token sniping was coming to an end. Fortunately, we had already accumulated a large amount of ETH, and even just holding onto it was doing quite well; life was very comfortable.
But in December, the altcoin market made a comeback. Token issuance on Uniswap became active again, and a new launchpad quietly emerged: Polkastarter.
Its initial sale was with the SpiderDAO project, with a limit of 2.5 ETH per wallet. However, my brother discovered that this limit only applied to the user interface (UI), and we could still buy in large quantities directly through the contract. We sent several large transactions, successfully buying 50% of the total supply, and even snatched it up when it went live. This deal made us $500,000, and we were back.
This example perfectly illustrates the current state of the crypto ecosystem. Most project teams are complete novices, with no idea what they're doing. This is a golden opportunity for us, and we certainly want to take advantage of it.
At that time, some decentralized finance (DeFi) projects began launching synthetic assets, and we made $600,000 from arbitrage.
December became a turning point in our entrepreneurial journey—my brother decided to resign from his position as a university professor.
The following January, we moved to Dubai, where we both devoted ourselves to sniping deals.
Our mindset is simple: we'll seize any opportunity that comes our way. Even if the potential profit is only a "mere" $10,000, we'll act. We know this window of opportunity won't last forever, and we don't want to miss any chance.
In January, we made several good profits, such as with PHOON, accumulating a profit of $3 million.
Most of these profits were held in ETH, and the price of ETH soared—from $200 when we started our attack to $1,400 at the end of January, in just five months.
Counter-sniper measures
Since February 2021, an increasing number of projects have implemented anti-sniping measures when launching their tokens. People have grown tired of snipers and have begun incorporating anti-sniping mechanisms into token issuance.
The first measure: Purchase limits. For the first few minutes after a token launch, users could only purchase X number of tokens. My brother pioneered a sniper smart contract with a loop function, allowing a single transaction to purchase the majority of the initial supply—buying the limited number of tokens each loop. This smart contract gave us a competitive edge, as most competitors lacked this technology.
Smart contract innovation is one of our biggest strengths. My brother always manages to find a way to snipe us, and we actually welcome counter-sniping measures—they make the competition less intense.
The second measure: single wallet purchase limits. My brother designed a main contract with "sub-smart contracts," which would call a new sub-contract for each purchase transaction.
These features were very useful and played a huge role during the altcoin frenzy on the Binance Smart Chain in the following months.
Polkastarter's heyday and fierce competition
Starting in February 2021, the Polkastarter era officially began. Every token issued on Polkastarter experienced a surge in price, and for snipers, each token represented an opportunity to earn seven figures.
But the competition has become extremely fierce. Although we are still able to make a profit, things are getting harder and harder.
We designed a new feature called "Suicide Sniping".
The principle is simple: we discovered that many avid players don't set any buy limit price when sniping. Our "suicide sniping" feature sends an extra buy order with no limit price, and then automatically sells it four blocks later, reaping all the snipers who enter the market after us.
This isn't exactly a life-changing strategy, but it's easy to earn 50-150 ETH from it.
The competition later became fierce, with a guy named 0x887 becoming faster than everyone else. We spent countless hours upgrading our bots, trying to customize Ethereum nodes to achieve the fastest sniping speed, testing day after day, but we could never surpass this sniper.
Binance Smart Chain Frenzy
It was mid-February 2021. My brother and I moved into the same place in Dubai—it was wonderful, as we hadn't lived in the same city for the past six years. We threw ourselves into sniping deals, constantly looking for new opportunities, and always ready to design and develop new features.
Although the competition on Ethereum is fierce, we continue to target it and continue to profit, but we know this situation will not last forever.
We'd heard that the Binance Smart Chain (BSC) ecosystem was thriving, with some tokens performing exceptionally well. We decided to buy a large amount of BNB at around $80—we figured we might need it for a future sniping attack.
Our first sniping on BSC was the altcoin BRY on February 16th. We knew nothing about the sniping patterns and competition on BSC, so it was time to find out.
Investing 200 BNB and selling them all within 30 minutes yielded a profit of 800 BNB, equivalent to $80,000. While not as profitable as on Ethereum, this is still quite good and shows promising potential.
Our second BSC sniping target was MATTER: we invested 75 BNB and sold 2100 BNB. My goodness, a net profit of 2000 BNB! And the price of BNB was strong, reaching $240 by the end of February. We felt the enormous potential—top sniper 0x887 seemed completely uninterested in BSC, which was practically free money for us. We had to go all in and snipe every target.
March was a bountiful month. Token issuance on Ethereum remained hot, earning us millions of dollars; the BSC market was even more frenzied, with us making a profit of 15,000 BNB throughout March, especially from the KPAD deal, which earned us 8,300 BNB.
I vividly remember the sniping of KPAD; it was our biggest single win to date.
I was in my apartment in Dubai at the time, and I knew that this token was generating a lot of buzz and was sure to skyrocket. I was sweating with nervousness and even doubted whether I could successfully get in.
After the project launched, the BSCscan browser was incredibly laggy. I logged into Pancakeswap and saw a huge pile of KPADs in my wallet—oh my god! My attention instantly focused; I was like a computer fanatic, starting to sell in batches. Selling just 1% of my position made me a fortune. My hands were shaking terribly as I executed the sell orders with complete concentration, making $2 million in profit within an hour.
Five days later, an altcoin called COOK was going to be listed on multiple blockchains. I told my brother we should focus our efforts on targeting the Huobi Ecosystem Chain (HECO), because the competition there would be very low. After the token was listed on HECO, we invested 550 BNB to buy it, and then, before the trading pair on BSC was unlocked, we successfully transferred it across chains to BSC, sold it all, and made a profit of 3000 BNB. That feeling was amazing!
By the end of March, the price of BNB had risen to $300.
BSC Infrastructure and Optimization
In early April, the market slowed down. We took the opportunity to relax and go on vacation to the Maldives, but as soon as we landed, we heard that several popular altcoins were about to be listed on BSC, so we had to be prepared.
We decided to conduct speed tests on BSC. At the time, BSC operated differently from Ethereum: on Ethereum, you needed to quickly detect pending liquidity-adding transactions and then quickly send your transaction to other nodes.
We discovered a few weeks ago that the order of transactions within blocks on BSC is random. When you detect a pending transaction and send a buy order, your transaction might be prioritized before transactions adding liquidity, causing the transaction to fail.
We deployed 10 nodes on Amazon Web Services (AWS) globally, each sending 50 transactions to attempt to snipe a random test transaction. After completing 20 sets of tests, we analyzed the transactions in the same block as the transaction that added liquidity.
The following conclusions can be drawn:
1. The best performing nodes are located in northern Virginia and Frankfurt, and sometimes nodes in Tokyo also perform well;
2. The first 5-15 transactions sent by a single node are most likely to successfully enter the target block;
3. The highest-configured servers on Amazon Web Services (AWS) can enable more transactions to successfully enter the target block.
To facilitate subsequent interception of transactions, we built an infrastructure consisting of 150-200 nodes on BSC, with each node sending 10 transactions.
Running such an infrastructure on AWS costs between $40,000 and $60,000 per month.
For my brother, operating this infrastructure was a significant challenge—he had to start up nodes one by one on 150 terminals. Keep in mind, we didn't have any employees; everything had to be done by ourselves, just my brother and me.
We have a huge advantage on BSC: on the one hand, we have extensive experience on Ethereum, and on the other hand, we are willing to invest in infrastructure, which sets a high barrier to entry for small-scale snipers.
The Memecoin Era on BSC
We're now completely focused on BSC, sometimes conducting six raids a day. We barely have time for a normal life; our minds are consumed by raiding altcoins. We're always racing against time, spending most of our time preparing new raid trades, with almost no time to optimize our equipment.
I remember many of my snipe experiences, especially the PINKM (Pinkmoon) incident—due to the buy-in limit, we used 120 wallets to snipe and made $3 million in two hours. The next day, I bought a Lamborghini Aventador SV sports car.
In May 2021, two Launchpads on BSC became popular, allowing anyone to execute listing transactions. My brother pioneered the design and development of a smart contract that could complete both token listing and purchase operations in the same transaction.
This might seem ordinary now, but back then, nobody did it. I remember one week when those two Launchpad projects were incredibly popular, and we sniped almost every token that launched, making seven figures every day for a whole week. One night, I was having dinner with friends at Nammos when my brother messaged me saying he was going to snipe a project. When I got home, we had made another million dollars.
Towards the end of the month, market enthusiasm on BSC began to cool down, and we decided to sell most of our holdings when the BNB price was around $450.
There will be a few more opportunities to buy in June, but the overall market feels quite weak.
The end of this era of sniping is actually a relief for us—we were exhausted and really needed a good rest.
We've been traveling all summer, and finally we can enjoy life to the fullest.
An unexpected windfall
In August 2021, we were enjoying our summer vacation and hadn't been involved in the cryptocurrency market much, only doing some basic operations. By chance, we discovered that a blacklisted wallet was still holding EVN tokens that we hadn't been able to sell before.
At the time, the price of EVN skyrocketed, and the tokens in just this one wallet were worth about $1 million (excluding slippage, the amount shown by Etherscan) - while we had more than 20 wallets blacklisted.
We first tried selling $200 worth of tokens on Uniswap, and it worked. We thought, "Wow, maybe we can sell small amounts to each wallet and make a few thousand dollars."
We tried selling from the same wallet again, and this time we made $2,000. We were amazed and felt that this afternoon might be a big one.
We then tried again, this time selling all the tokens in the wallet: we ended up with 233 ETH (we only spent 2.5 ETH to buy them initially).
Adrenaline surged, and we frantically checked all the blacklisted wallets, dumping them on Uniswap as quickly as possible. Some wallets remained blacklisted, while others had their restrictions lifted—we had no idea why. We frantically sold, watching millions of dollars pour into our accounts, like money being printed.
For 15 consecutive minutes, we frantically sold off all the tokens we could find and then transferred all the funds to a cold wallet. We originally expected to make $2-3 million, but that summer afternoon, we made $6 million out of thin air.
To this day, we have absolutely no idea what happened or why these wallets were unrestricted.
This month, when the price of ETH broke through $3,000, we also sold a large amount of ETH that we had earned through sniping – we felt it was time to lock in the profits and achieve financial freedom.
Conclusion
That year was probably our craziest year to date. We started with only $40,000 in funding, had absolutely no understanding of the underlying logic of blockchain, and were completely ignorant of Solidity.
Ultimately, we targeted over 200 altcoins across more than 10 different blockchains. It was a great honor to go through all of this with my brother.
Those emotional ups and downs and thrilling experiences are almost indescribable.
