Mind the Gap: Liquidity Poisoning Attacks on Multihop Cross-Chain Arbitrage

Abstract

Cross-chain bridges enhance DeFi liquidity but introduce temporal gaps that expose multihop sequence-dependent arbitrage (SDA) to adversarial manipulation. Prior work attributes the rarity of SDA primarily to latency and transaction costs. We hypothesize that adversarial fragility is an additional factor and demonstrate this in 10 real multihop SDA paths from Allium data: bridge delays create predictable windows in which intermediate liquidity can be manipulated.

We introduce Multihop SDA Liquidity Poisoning (MSLP), an attack model that exploits cross-chain asynchrony to degrade arbitrage profits without requiring transaction reordering or violating execution constraints. In our dataset, MSLP requires median capital of USD 21 to render 90% of paths unprofitable, reducing mean profit from USD 28.42 to USD -3.29. These results suggest that, beyond execution efficiency, the robustness of intermediate market states plays a critical role in the viability of cross-chain arbitrage.