How Does a Commit-Reveal Scheme Protect a Trade from Being Front-Run? ⎊ Path

How Does a Commit-Reveal Scheme Protect a Trade from Being Front-Run?

A commit-reveal scheme works in two phases. In the "commit" phase, a trader submits a cryptographic hash of their transaction (the commitment) to the blockchain, but the actual trade details are kept secret.

In the later "reveal" phase, the trader submits the original, unhashed transaction data. Since the front-runner only sees the hash in the mempool, they cannot determine the trade's details or profitability to exploit it, thus ensuring the trade is executed fairly.

Does the Use of a Private Mempool Negate the Need for a Commit-Reveal Scheme?

What Is the ‘Commitment’ Step in a Commit-Reveal Scheme and What Information Does It Contain?

Why Is the Inclusion of a ‘Salt’ or Random Secret Number Essential in the Commitment Hash?

How Do ‘Commit-Reveal’ Schemes Mitigate Front-Running?

What Is a “Commit-Reveal” Scheme and How Is It Used in Decentralized Finance (DeFi) Options?

What Is the Disadvantage of Using a Commit-Reveal Scheme for High-Speed Trading?

What Is a Commit-Reveal Scheme and How Does It Deter Malicious Transaction Ordering?

What Are the Two Distinct Phases of a Commit-Reveal Scheme?

Glossar

Commit-Reveal

Mechanism ⎊ Commit-Reveal protocols, within decentralized finance, represent a staged disclosure of trading intentions, initially committing to a transaction and subsequently revealing the specifics.