Crypto glossary
Front-running
Front-running is placing a trade ahead of a known pending order to profit from the price move that order will cause, a practice common with on-chain MEV bots.
The idea comes from traditional markets, where a broker trading ahead of a client's large order is committing an illegal abuse. In crypto, the information is public: pending transactions sit in the mempool, so anyone watching can copy a profitable trade and pay a higher fee to get it confirmed first.
Bots front-run arbitrage opportunities, liquidations, NFT mints and new token listings, and some even copy whole transactions from rescue attempts or exploits. Validators and block builders can also reorder transactions within a block. Combined with a sell order placed right after the victim, front-running becomes a sandwich attack.
On public blockchains front-running is largely a design problem rather than a crime, though centralized exchanges and their staff remain bound by market abuse rules in many jurisdictions. Private mempools, batch auctions and encrypted transaction ordering are among the defences being used.
Example
A bot sees a pending purchase of $200,000 of a token in the mempool, buys first with a higher gas fee and sells to the victim at a higher price once their order goes through.
