‘Mempool Sniping’ Plagues Bitcoin Ordinals

The Bitcoin network is experiencing a significant uptick in “mempool sniping,” which threatens to allow a small number of sophisticated entities to dominate Ordinals trading.

Mempool sniping is a form of transaction front-running enabled on Bitcoin by the arrival of Ordinals. Opportunistic snipers take advantage of transactions queuing in Bitcoin’s mempool by front-running trades to ensure they are the winning bidders.

While users do not lose funds due to mempool sniping attacks, the increasing prevalence of sniping could make it impossible for less sophisticated traders to submit winning bids on Ordinals and Runes tokens.

In recent months, mempool sniping has gotten worse, with hundreds of these transactions taking place daily. According to the snipes Discord channel for The Wizards of Ord, 220 snipes occurred today alone, worth 3.9 BTC or $247,000, with similar numbers for the preceding weeks.

The founder of Magisat, a rare sats marketplace, ran a poll on June 12 asking users whether they had been sniped. Of 229 votes cast, 73% voted yes.

One of the worst snipes took place on July 10, when one of the founders of the Bored Ape Yacht Club, Xeer, engaged in a “sniping battle” that caused him to not only lose more than $5,800 in fees but also miss out on the chance of picking up an Ape Hoodie Ordinal.

“Mempool sniping leads to a degraded experience for many users who just want to click and buy and not have to babysit their order for 30 minutes,” said Leonidas, the creator of the popular Ordinals collection, Runestones. “Mempool sniping… is an issue on every blockchain, but it is particularly popular on Bitcoin due to the 10-minute block time that allows for lots of back and forth wars.”

“Mempool sniping is going wild,” Mononaut, the creator of mempool.space, tweeted on March 19. Mononaut noted an Ordinal trade that was broadcast at the listed price of 0.069 BTC ($4,200) before being replaced at least 14 times by competing buyers who bid the fees up to 0.126 BTC ($7,686) within a few minutes.

Users began to sound the alarm on mempool sniping last year as Ordinals and Runes grew in popularity.

Ordinals pioneered the technique of inscribing data into Bitcoin satoshis — the smallest divisible unit of BTC — to enable the creation of NFT-like assets. Ordinals also gave rise to inscription-based standards for creating fungible tokens in the form of BRC-20 and Runes.

Ordinal trades are executed through sellers signing off-chain PSBTs (partially signed Bitcoin transactions) that broadcast a minimum sale price to the Bitcoin network. Anyone can then complete the trade by sending the requested sum in BTC to the seller’s address.

However, buyers must wait for Bitcoin’s ten-minute block time to elapse before the transaction clears and is included in the next Bitcoin block. This gives ample time for sophisticated users to enter the mempool and snipe the trade for themselves by offering a higher price to the seller.

Mempool sniping began to garner widespread attention across the Ordinals community in November 2023 amid the OrdiBots mint.

OrdiBots is a 3D Ordinal collection featuring Augmented Reality (AR). During its highly anticipated November 2023 mint, sophisticated bots front-ran collectors by bidding higher than their PSBT transactions to claim the Ordinals for themselves.

Leonidas has been on the sniper trail since the OrdiBots attack. He said that many in the Ordinals community anticipated the rise of mempool sniping but were caught off guard by its speed of emergence.

Looking forward, Leonidas hopes that the maturation of Bitcoin’s Layer 2 ecosystem could help to alleviate the issue.

“We all knew it was inevitable, but I don’t think people realized it would come so fast,” Leonidas told The Defiant. “This is a reality we have to live with until L2 infrastructure becomes more robust.”

Jake Gallen, CEO of Emblem Vault, a cross-chain NFT platform, echoed the sentiment. Gallen told The Defiant that the issue is “much worse now” and hurting the user experience.

Solutions Are Emerging, But Risks Remain

According to Leonidas, there are several companies building tooling to address the issue.

For example, Magic Eden, an Ordinals marketplace with $930,000 in 24-hour trading volume, has been at the forefront of the fight against mempool sniping. The platform recently released a feature that allows prospective buyers to automatically bid up to a specified price in the event that their initial transaction falls victim to sniping.

Another solution Leonidas floated was creating an option to make bulk offers on Ordinals collections, which could protect individual users by pricing out potential snipers. However, he said, this comes with its dangers because it might result in a company suffering a security vulnerability where all of the offers are stolen.