How Does a Private Transaction Pool Prevent Front-Running in DeFi?
A private pool allows users to submit transactions directly to a block producer without broadcasting them to the public mempool. This prevents malicious bots from observing the pending order and paying a higher gas fee to execute a trade first.
By keeping the transaction details confidential until execution, the pool mitigates Maximal Extractable Value (MEV) attacks like front-running.
Glossar
Private Pool
Liquidity ⎊ A private pool, within the context of cryptocurrency derivatives, represents a concentrated source of capital deployed for specific trading strategies, often involving options or futures contracts, distinct from public order books.
Decentralized Autonomous Organizations
OrganizationalForm ⎊ Decentralized Autonomous Organizations represent organizational structures encoded in software, governed by rules enforced via smart contracts on a blockchain, where decision-making power is distributed among token holders.
Maximal Extractable Value
Concept ⎊ Maximal Extractable Value, or MEV, refers to the profit that miners or validators can extract by strategically reordering, censoring, or inserting transactions within a block.
Private Transaction Pool
Pool ⎊ A Private Transaction Pool (PTP) represents an off-chain aggregation of cryptocurrency transactions, distinct from public blockchains or order books.