What Is ‘Front-Running’ in the Context of DeFi and Oracles?

Front-running is a malicious practice where a trader observes a pending transaction (like a large buy order) in the blockchain's memory pool (mempool) and submits their own transaction with a higher gas fee. This ensures their transaction is executed first, allowing them to profit from the anticipated price movement.

In the context of oracles, front-running can involve executing a trade just before a scheduled price update to profit from the stale price.