How Does the Concept of a ‘Mempool’ Relate to the Risk of ‘Front-Running’ in DeFi?

The Mempool exposes pending transactions, allowing malicious actors to observe them before they are confirmed. Front-running occurs when an observer sees a profitable pending transaction, like a large decentralized exchange (DEX) order, and quickly submits their own transaction with a higher fee.

This higher fee ensures the malicious transaction is processed first, profiting from the original transaction's impact on the market price. This exploitation of the Mempool is known as Miner Extractable Value (MEV).