What Is a ‘Just-in-Time’ (JIT) Liquidity Provision Attack and How Does It Exploit Concentrated Liquidity Pools?

A JIT attack involves a bot observing a large incoming trade, providing concentrated liquidity for a very short duration right before the trade executes, capturing the transaction fee, and then immediately withdrawing the liquidity. This is primarily seen in concentrated pools where capital efficiency is high.

The attacker earns fees without being exposed to impermanent loss for any significant period, effectively front-running the trade.