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.