Crypto Terms: Letter F

What is Front Running?

Front Running MEANING:
Front Running - an illegal practice of putting a transaction in a queue after gaining advantageous knowledge about future transactions.
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Let's find out Front Running meaning, definition in crypto, what is Front Running, and all other detailed facts.

On a blockchain platform, front running occurs when a miner with access to information on pending transactions places an order that will profit him from a pending trade. On the Ethereum blockchain, for example, when bots have the ability to quote a higher gas price than a pending rate, front running might occur.

There are also other parties that are capable of front running like, for example, full node operators that gain knowledge of uninformed transactions by monitoring network activities. Centralized exchanges (CEXs) can also perform front running but it's not in their best interest to cheat on their clients. Overall, there is a variety of methods that can be used to arrange front running.  

Since front running is an illegal practice, it is also referred to as an attack when there is malicious intent included. There are three main types of malicious attacks using front running:

  • A displacement attack which happens when a genuine transaction is replaced with the transaction of the malicious actor.
  • An insertion attack which happens when a genuine transaction is "sandwiched" between two transactions aiming for profit without holding an asset.
  • A suppression attack which delays the execution of a genuine transaction.

Front running can be prevented by improving transaction confidentiality and sequencing transactions. Confidentiality can be applied to many different parts of a decentralized application (DApp). Transaction sequencing, on the other hand, can be achieved using implementations like the canonical transaction ordering rule used by Bitcoin (BCH).