Wall Street's blockchain surveillance problem: every trade is public

In May 2023, a bot called ‘jaredfromsubway.eth’ emerged as one of the most notorious market value extractors (MEVs) on Ethereum, executing hundreds of thousands of sandwich attacks and extracting millions in profits by simply watching the public mempool, a waiting area for unconfirmed transactions that anyone can access. By August 2024, the bot had evolved with even more sophisticated techniques, processing over 85,000 transactions and generating approximately $2 millions of income. The bot spotted pending trades, front ran them with higher gas fees and pocketed the difference. Each victim’s transaction was visible before execution, creating what traders call “a glass house where everyone can see you counting your money.”

MetaMask transaction shield

Source: X

And this is not an isolated incident: it is the predictable result of institutions moving US trillions in stablecoins onto transparent blockchains where every transaction, wallet balance and trading pattern is permanently recorded a…