What Is a ‘Front-Running’ Attack in the Context of an Oracle Price Update?
A front-running attack occurs when a malicious actor sees a pending, profitable oracle price update transaction in the memory pool (mempool). The attacker then submits their own transaction with a higher gas fee to execute a trade (e.g. a large options position) before the oracle price update is confirmed, profiting from the imminent, predictable price change.
Glossar
Higher Gas Fee
Barrier ⎊ : Elevated fee structures act as a significant economic barrier to entry and operation within the network, disproportionately affecting smaller transactions or less capitalized entities.
Oracle Price Update
Update ⎊ Oracle Price Update refers to the process where a decentralized data feed transmits a new valuation for an underlying asset to a smart contract, often triggering margin adjustments or option settlements in associated derivatives protocols.