How Does ‘Private Transaction Relay’ Attempt to Prevent Front-Running?
A private transaction relay is a mechanism where a user's transaction is sent directly to a select group of miners/validators instead of broadcasting it to the public mempool. This prevents front-runners from observing the pending trade and inserting their own profitable transaction.
The transaction is included in a block without ever being publicly visible, eliminating the information asymmetry that enables front-running.
Glossar
Private Transaction Relay
Relay ⎊ A Private Transaction Relay (PTR) within cryptocurrency, options, and derivatives represents a sophisticated architectural pattern designed to obfuscate the origin and destination of financial transactions, enhancing privacy and potentially mitigating regulatory scrutiny.
Relay
Mechanism ⎊ Within cryptocurrency derivatives and options trading, a Relay functions as a programmatic bridge facilitating the transfer of assets or data between disparate blockchain networks or systems.