Understanding Front Running
Front running refers to the practice of placing a transaction ahead of others by having prior knowledge of a future transaction.
In blockchain platforms, front running often occurs when a miner or other entities with access to pending transactions use this information to their advantage.
By strategically placing orders, they can profit from the upcoming trades.
Front Running in Blockchain
Various parties can engage in front running, including full node operators responsible for monitoring network activities and gaining knowledge of unconfirmed transactions.
Although centralized exchanges have the capability to conduct front running, it would generally be against their best interest to cheat their own customers.
Additionally, front running can be orchestrated through different methods, such as generalized front running, which exploits potentially profitable contract calls.
Front Running Attacks
Several types of attacks are associated with front running, including displacement, insertion, and suppression.
In a displacement attack, a malicious actor replaces a genuine transaction with their own.
While the original transaction may proceed, its intended positive effect diminishes.
In an insertion attack, a genuine transaction is sandwiched between two other transactions, aiming to make a profit without holding an asset.
The suppression attack is designed to delay other participants from executing a transaction.
Once the suppression is lifted, the front runner is less concerned about the previously suppressed trade.