How Does the "Front-Running" Issue Manifest Differently in AMMs versus CLOBs? ⎊ Path

How Does the “Front-Running” Issue Manifest Differently in AMMs versus CLOBs?

In CLOBs, front-running typically involves seeing a large pending order and placing an order ahead of it to profit from the expected price movement. In AMMs, front-running is often executed by MEV bots that observe a pending transaction in the mempool and submit a transaction with a higher gas fee to execute an arbitrage or a sandwich attack immediately before the original transaction, profiting from the price shift it causes.

Contrast the AMM Model with the Traditional Central Limit Order Book (CLOB)

How Do Private Transaction Relays like Flashbots Mitigate MEV?

How Do Private Transaction Relays Prevent the Visibility Required for Front-Running?

How Do Different Nodes’ Mempool Sizes and Policies Affect Transaction Visibility?

What Is the Difference between an AMM and a Central Limit Order Book (CLOB)?

What Is the Primary Difference in How Slippage Is Calculated on an AMM versus a CLOB?

Explain the Role of the ‘Mempool’ in Preventing or Causing Front-Running in DeFi

How Does the Public Mempool Enable Front-Running in DeFi?

Glossar

Amms

Framework ⎊ Automated Market Makers (AMMs) represent a foundational shift in decentralized finance (DeFi), providing liquidity and price discovery mechanisms without traditional order books.