What Is the Primary Difference in Front-Running Risk between CEXs and DEXs? ⎊ Path

What Is the Primary Difference in Front-Running Risk between CEXs and DEXs?

Centralized Exchanges (CEXs) primarily face front-running risks from internal actors, such as employees or high-frequency traders with privileged data access. This is a traditional market integrity issue, often illegal.

Decentralized Exchanges (DEXs) face risk from external, automated bots that exploit the public visibility of the mempool (pending transactions). These bots use high gas fees to force their trade to execute before the target transaction.

The transparency of the blockchain is the core vulnerability for DEX front-running.

How Does Front-Running in DeFi Compare to ‘Insider Trading’ in Traditional Finance?

How Do Private Transaction Relays Prevent the Visibility Required for Front-Running?

What Is a Mempool and Why Is It Crucial for DEX Front-Running?

How Do Different Nodes’ Mempool Sizes and Policies Affect Transaction Visibility?

What Is the Role of the “Mempool” in Facilitating Front-Running Attacks?

How Does the Risk of “Front-Running” Differ between LOBs and AMMs?

Does the Use of Derivatives Increase or Decrease Front-Running Risk on a CEX?

What Is the Role of a ‘Chinese Wall’ in a CEX’s Internal Structure?