How Do Commit-Reveal Schemes Technically Prevent Front-Running in Blockchain Transactions?
A commit-reveal scheme is a two-step process that prevents front-running by obscuring a transaction's details. First, the user submits a 'commitment' ▴ a cryptographic hash of the transaction details ▴ to the blockchain.
This proves the order's intent and timing without revealing the specifics. Second, the user submits the actual transaction details, the 'reveal,' only after the commitment is confirmed in a block.
Since the specific trade details are not public until execution, front-runners cannot profitably place an order ahead of it.