What Is a 'Speed Bump' and How Does It Deter Front-Running? ⎊ Path

What Is a ‘Speed Bump’ and How Does It Deter Front-Running?

A speed bump is a mechanism implemented by an exchange that intentionally introduces a small, fixed delay (e.g. a few milliseconds) before an order is executed or routed. This delay is applied equally to all participants.

It negates the nanosecond-level advantage high-frequency traders seek, preventing them from consistently reacting to and front-running slower participants' orders.

How Do “Speed Bumps” Technically Delay Order Execution to Prevent Front-Running?

What Are the Differences between Front-Running in Traditional Finance and on DEXs?

What Is a ‘Relay Network’ and How Does It Aim to Reduce Block Propagation Delay?

How Do Frequent Batch Auctions Work to Prevent High-Frequency Trading Advantages?

How Does the Use of High-Frequency Trading (HFT) Algorithms Relate to Front-Running Accusations?

What Are the Advantages of Using an Iceberg Order over a Simple Series of Small Market Orders?

What Is the Legal Distinction between Front-Running and High-Frequency Trading (HFT) Strategies?

How Is Transaction Latency on a Blockchain Analogous to Market Data Feed Speed in Traditional High-Frequency Trading?

Glossar

Speed

Velocity ⎊ Speed within cryptocurrency, options, and derivatives contexts primarily denotes the rate at which transactions are processed and confirmed, impacting market efficiency and arbitrage opportunities.