Bitcoin Ordinals have debunked early skepticism, maintaining their presence two years post-launch as NFT-style collectibles. Among the innovative ways that traders exploit these is a strategy called “replace-by-fee” (RBF) sniping, which can yield significant financial returns when conditions align. This tactic relies on offering higher transaction fees to prioritize certain trades on the Bitcoin network, akin to bribing a bus driver to cut to the front of the line. While legal and based on Bitcoin’s inherent fee auction system, many view it as unfair.
Platforms like Magisat facilitate RBF sniping, allowing participants to identify and outbid competitors for pending transactions. Yet, it’s not risk-free. Quary from Magisat, once able to earn up to two BTC nightly when competitors were fewer, now shares the spoils with an increasing number of snipers. A trainee under his guidance, despite aspirations to profit and donate earnings, found the method challenging, often ending up with unsellable assets and dwindling Bitcoin reserves.
Sniping involves scanning platforms for pending sales and tactically bidding higher transaction fees. Despite honing strategies, the initiative can backfire, leading to accumulated fees and financial setbacks for the inexperienced. As platforms like Magic Eden, a favorite for trading Bitcoin assets, respond to frustrations with snipers by implementing updates to restrict this activity, the RBF sniping landscape faces new challenges.
Magic Eden introduces a system using Merkle trees to pre-approve buyers, subdividing transactions to thwart snipers and preserve user experience. While effective, this approach primarily curbs sniping on Magic Eden, leaving other marketplaces as potential grounds for snipers. A case highlights the financial peril: buying an Ordinal in a competitive bid reflects the race against bots and other participants, echoing the inherent volatility and unpredictability of RBF sniping.
