Ross Ulbricht lost $12 million to an MEV bot while attempting to provide liquidity for the ROSS meme coin on Raydium, a decentralized exchange (DEX) on Solana.
Some traders are indeed “minting” money trading meme coins, as they tap into the $105 billion market cap industry.
However, the unfortunate reality is that most meme coin traders end up losing. This is often due to poor trades, scams, and sometimes the actions of highly efficient bots.
What Happened to Ross Ulbricht?
According to analysis by Arkham Intelligence from January 30, Ross Ulbricht, or someone who had access to his wallets on Solana, lost around $12 million during a misguided liquidity provision attempt for the ROSS meme coin. The coin, similar to Trump, was launched on Pump.fun, a Solana launchpad.
It appears that a miscalculation in the liquidity pool on Raydium led to his significant loss. Ulbricht mistakenly initialized the liquidity pool at the wrong price, which a Maximal Extractable Value (MEV) bot quickly capitalized on, sniping $1.5 million worth of tokens and selling them back into the pool.
MEV Bot
(Source: Arkham Intelligence)
He repeated this process, and this time the bot took another $10.5 million, which represented 35% of the total supply, leading to the plummeting of the ROSS token by over 90%.
ROSS Token Drop
(Source: Gecko Terminal)
Should We Blame Ulbricht or the MEV Bots?
As the prices dropped, ROSS holders also suffered losses. Unless ROSS gains traction now that Ulbricht has become a celebrity figure known for bridging crypto into mainstream narratives, the token is likely to continue declining or remain stagnant.
The key question remains: Should blame be placed on Ulbricht for his error or on Solana’s aggressive bots?
While Ulbricht may have made a mistake, the swift reaction of the MEV bots left no room for correction, exploiting opportunities to extract profits from others.
It’s worth noting that this scenario is common in Solana’s environment. With numerous meme coins gaining traction and daily trades reaching billions, MEV bots are actively snatching capital from all DEX participants, continuously scanning the blockchain for exploitable errors.
For example, in 2024, a trader accidentally acquired WIF at $3 while it was actually trading for $0.20. An MEV bot seized this opportunity immediately.
Reports indicate that Jito Labs, a leading operator of flashbots, generated nearly $500 million from MEV activities on Solana in 2024.
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Disclaimer: Crypto investments are high-risk. This article is for informational purposes and does not serve as investment advice. There’s potential for complete loss of capital.
