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How Does Blockchain’s Inherent Transparency Affect Front-Running in Decentralized Finance (DeFi)?

Blockchain's public mempool allows actors to see pending trades and submit higher-fee transactions to execute first.
Greeks.Live15.11.25

How Does Blockchain’s Inherent Transparency Affect Front-Running in Decentralized Finance (DeFi)?

Blockchain transparency makes all pending transactions visible in the mempool before confirmation. This visibility is crucial for DeFi front-running, as malicious actors can observe a pending trade and submit a similar transaction with a higher gas fee.

This "gas war" allows the front-runner's transaction to be processed first, profiting from the original trader's price impact. This is a unique vector for front-running compared to centralized exchanges.

Define ‘Front-Running’ in the Context of DeFi and Oracle Feeds
What Is the Significance of the Mempool in the Context of DeFi Front-Running?
How Can ZKPs Prevent Front-Running in a Decentralized Options Market?
What Role Does Transaction Transparency in the Mempool Play in Enabling Front-Running?

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