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Wisdom of DeFi by EigenPhi · Oct 27, 2025

The Pawn-Shop Price Trap: Bots Farming Your Limit Orders

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EigenPhi · Wisdom of DeFi by EigenPhi

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And How to Avoid Them.

A beginner myth: “Unfilled limit orders can’t hurt me.” False. Two mismatched orders from the same wallet let a bot flip between them like a pawn-shop buy/sell sign and keep the gap. We show the loop, the numbers, and five fixes.

  • The pawn-shop analogy for mispriced limits

  • The 4-step flip loop that needed no upfront capital

  • How one bot repeated it ~30× in a block

  • Five guardrails to stop self-arbitrage

  • Transaction Token Flow: https://bit.ly/4iYK1h3

  • Etherscan Transaction: https://bit.ly/4hpWzij

This is educational content only. We do not endorse MEV bots or provide financial advice. Always DYOR (Do Your Own Research).

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Read the original on eigenphi.substack.com

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