Front-Running
Technical • Trading Mechanics • MEV
the invisible tax on every unprotected DEX trade
Front-Running is the act of detecting a pending transaction and inserting your own transaction ahead of it to profit from the price impact the original trade will create. In traditional finance, this is a broker seeing your order and buying first. In crypto, it is automated — bots scan the mempool for unconfirmed transactions, calculate the price impact, and pay higher gas fees to cut in line before your trade executes.
The most common form in crypto is the sandwich attack. A bot sees your pending swap on a DEX, buys the token before your trade executes (pushing the price up), lets your trade fill at the inflated price, then immediately sells after you — pocketing the difference. You receive fewer tokens than expected. The bot profits from the slippage it manufactured. The entire sequence happens in a single block.
Front-running exists because blockchain transactions are visible before they are confirmed. When you submit a swap on a DEX, it enters the mempool — a public waiting room where every pending transaction is visible to anyone watching. Bots monitor this constantly. They do not need insider access. The mempool is the insider access. Your intent is public before it executes.
This is the foundation of MEV — Maximal Extractable Value — the total profit that can be captured by reordering, inserting, or censoring transactions within a block. Validators and block builders have the power to decide transaction order, and that ordering power is worth billions annually across Ethereum alone. Front-running is the most visible form of MEV, but it includes back-running, arbitrage extraction, and liquidation sniping.
Front-running is not theoretical. It is a measurable, ongoing cost that every DEX trader pays whether they know it or not. The difference between your expected output and your actual output on a swap is not always pool math or volatility. Sometimes it is a bot that saw your trade, jumped ahead, and took the difference. The defense is understanding where the attack surface exists — and closing it.
Use Case: A trader submits a large XRP-to-USDT swap on a Flare-based DEX. A bot detects the pending transaction in the mempool, calculates the price impact, and executes a buy order for XRP at higher gas just before the trader’s swap. The trader’s swap fills at a worse price. The bot sells immediately after — extracting $140 from a single transaction the trader never saw coming.
Key Concepts:
- Slippage Risk — The price gap that front-running bots deliberately widen to extract profit
- Gas Price — The fee layer that front-runners exploit by outbidding your transaction priority
- Gas Fee Optimization — Strategies that reduce exposure to gas-based priority manipulation
- Decentralized Exchange — The permissionless venue where front-running operates unchecked without protections
- AMM — The automated pricing mechanism whose predictable math front-runners exploit
- Liquidity Pool — The on-chain reserve whose depth determines how much impact a front-run creates
- Smart Contracts — The execution layer where transaction ordering determines who profits
- DeFi Risk — The broader risk category that includes MEV extraction as a hidden trading cost
- Mempool — The public queue of unconfirmed transactions that exposes trade intent to bots
- Sandwich Attack — A front-run paired with a back-run that traps the victim’s trade between two bot orders
- MEV (Maximal Extractable Value) — The total profit extractable from transaction ordering within a block
- Block Builder — The entity that determines transaction order and enables or resists MEV extraction
- Swap Fee — The visible cost of a DEX trade, unlike front-running which is an invisible cost
- Order Book — The alternative trading model where limit orders reduce front-running exposure
Summary: Front-running is the predatory extraction of value from visible pending transactions by inserting priority trades ahead of them. In crypto, it is automated, constant, and invisible to most users. The mempool makes your intent public. Bots exploit that transparency. Defending against it requires understanding that the cost of a DEX swap is not just the fee — it is the information you broadcast before the trade confirms.
How a Sandwich Attack Works
three transactions, one block, one victim
Step 1: Detection
You submit a swap on a DEX — say 10,000 USDT for XRP. The transaction enters the mempool. It has not confirmed yet. A bot is watching. It reads your transaction, identifies the token pair, calculates the pool depth, and estimates exactly how much your trade will move the price.
Step 2: The Front-Run
The bot submits its own buy order for XRP — with a higher gas fee so it confirms before yours. This buy pushes the XRP price up slightly. The bot now owns XRP at the pre-impact price. Your swap has not executed yet.
Step 3: Your Swap Executes
Your original 10,000 USDT swap confirms — but the price has already moved because of the bot’s buy. You receive fewer XRP than you expected. The slippage tolerance you set? The bot calculated its trade to land just inside your tolerance. You accepted the worse price because your settings allowed it.
Step 4: The Back-Run
Immediately after your swap confirms, the bot sells its XRP — at the higher price your trade created. The bot bought low (before you), you bought high (moved by the bot), and the bot sold high (into the price you inflated). Three transactions. One block. You lost. The bot won.
Sandwich Reality: This is not hacking. This is not illegal in most jurisdictions. It is a structural exploit built into how public mempools and AMM pricing interact. The bot did not steal your tokens. It manufactured a worse price and let you pay it voluntarily through your own slippage settings.
Front-Running Defense Playbook
how to close the attack surface before you submit
Reduce Slippage Tolerance
Default slippage on most DEX interfaces is 0.5–1%. Bots calculate their profit margin based on your tolerance. If your slippage is set to 1%, the bot knows it can extract up to 1% from your trade and you will still accept the fill. Drop to 0.1–0.3% for large swaps. The trade may fail — but failing is cheaper than being sandwiched.
Use Private Transaction Relays
Services like Flashbots Protect (Ethereum) route your transaction directly to block builders instead of broadcasting to the public mempool. If bots cannot see your transaction, they cannot front-run it. This is the single most effective defense — removing visibility entirely.
Break Large Swaps Into Smaller Ones
A $50,000 swap on a thin pool is a neon sign for bots. Five $10,000 swaps spread across blocks reduce the per-trade profit for any single sandwich. The bot’s gas cost remains fixed — if your trade is small enough, the profit does not justify the attack.
Use Limit Orders Where Available
DEXs that support limit orders (order book models) do not expose your trade to mempool-based front-running. Your order sits on the book and fills at your price or not at all. No slippage tolerance. No mempool broadcast. No sandwich.
Trade on Low-MEV Chains
Ethereum mainnet has the deepest MEV ecosystem. Layer 2s, Flare, and other chains with lower bot competition and different block-building mechanics reduce exposure. The MEV infrastructure follows the money — smaller chains have less of it.
Defense Truth: You cannot eliminate front-running from public blockchains. You can only reduce your exposure. Tight slippage, private relays, split orders, and chain selection are not guarantees — they are layers of protection that make you a harder target than the next trader. Bots optimize for profit. Make the profit not worth the gas.
MEV Ecosystem Map
who extracts, who enables, and who pays
Front-Running Awareness Checklist
DEX security literacy — four-quadrant self-assessment
⬜ Can explain how a sandwich attack works in four steps
⬜ Understand that mempool visibility is the root attack surface
⬜ Know the difference between front-running, back-running, and JIT liquidity
⬜ Slippage tolerance set to 0.1–0.3% for large swaps
⬜ Use private transaction relays when available
⬜ Break large trades into smaller split orders
⬜ Understand that validators and block builders profit from transaction ordering
⬜ Know that MEV extraction is an invisible cost on top of visible swap fees
⬜ Can evaluate which chains and DEXs have lower MEV exposure
⬜ Check pool depth before large swaps to assess vulnerability
⬜ Use limit orders on DEXs that support them
⬜ Verify actual output against expected output after every swap