SoK: Mitigation of Front-Running in Decentralized Finance

Carsten Baum; James Hsin-yu Chiang; Bernardo David; Tore Kasper Frederiksen; Lorenzo Gentile

doi:10.1007/978-3-031-32415-4_17

SoK: Mitigation of Front-Running in Decentralized Finance

Carsten Baum, James Hsin-yu Chiang, Bernardo David, Tore Kasper Frederiksen, Lorenzo Gentile

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

2 Scopus citations

Abstract

Front-running is the malicious, and often illegal, act of both manipulating the order of pending trades and injecting additional trades to make a profit at the cost of other users. In decentralized finance (DeFi), front-running strategies exploit both public knowledge of user trades from transactions pending on the network and the miner’s ability to determine the final transaction order. Given the financial loss and increased transaction load resulting from adversarial front-running in decentralized finance, novel cryptographic protocols have been proposed to mitigate such attacks in the permission-less blockchain setting. We systematize and discuss the state-of-the-art of front-running mitigation in decentralized finance, and illustrate remaining attacks and open challenges.

Original language	English
Title of host publication	Financial Cryptography and Data Security. FC 2022 International Workshops - CoDecFin, DeFi, Voting, WTSC, Revised Selected Papers
Editors	Shin’ichiro Matsuo, Lewis Gudgeon, Daniel Perez Hernandez, Sam Werner, Ariah Klages-Mundt, Thomas Haines, Aleksander Essex, Andrea Bracciali, Massimiliano Sala
Publisher	Springer Science and Business Media Deutschland GmbH
Pages	250-271
Number of pages	22
ISBN (Print)	9783031324147
DOIs	https://doi.org/10.1007/978-3-031-32415-4_17
State	Published - 2023
Externally published	Yes
Event	26th International Conference on Financial Cryptography and Data Security, FC 2022 - Saint George, Grenada Duration: 2 May 2022 → 6 May 2022

Publication series

Name	Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume	13412 LNCS
ISSN (Print)	0302-9743
ISSN (Electronic)	1611-3349

Conference

Conference	26th International Conference on Financial Cryptography and Data Security, FC 2022
Country/Territory	Grenada
City	Saint George
Period	2/05/22 → 6/05/22

Bibliographical note

Publisher Copyright:
© 2023, International Financial Cryptography Association.

Funding

J. Hsin-yu Chiang—This work was supported by the PhD School of DTU Compute. B. David—This work was supported by the Concordium Foundation and by the Independent Research Fund Denmark (IRFD) grants number 9040-00399B (TrA2 C), 9131-00075B (PUMA) and 0165-00079B. T. K. Frederiksen—This work was supported by “Sikker brug af følsomme data”, Performance Contract 2020 and “Digital sikkerhed, tillid og dataetik”, Performance Contract 2021–2024, Ministry of Higher Education and Science, Denmark”.

Funders	Funder number
Concordium Foundation
Uddannelses- og Forskningsministeriet
Danmarks Frie Forskningsfond	0165-00079B, 9040-00399B, 2021–2024, 9131-00075B, TrA2 C

Access to Document

10.1007/978-3-031-32415-4_17

Cite this

Baum, C., Hsin-yu Chiang, J., David, B., Frederiksen, T. K., & Gentile, L. (2023). SoK: Mitigation of Front-Running in Decentralized Finance. In S. Matsuo, L. Gudgeon, D. Perez Hernandez, S. Werner, A. Klages-Mundt, T. Haines, A. Essex, A. Bracciali, & M. Sala (Eds.), Financial Cryptography and Data Security. FC 2022 International Workshops - CoDecFin, DeFi, Voting, WTSC, Revised Selected Papers (pp. 250-271). (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 13412 LNCS). Springer Science and Business Media Deutschland GmbH. https://doi.org/10.1007/978-3-031-32415-4_17

Baum, Carsten ; Hsin-yu Chiang, James ; David, Bernardo et al. / SoK : Mitigation of Front-Running in Decentralized Finance. Financial Cryptography and Data Security. FC 2022 International Workshops - CoDecFin, DeFi, Voting, WTSC, Revised Selected Papers. editor / Shin’ichiro Matsuo ; Lewis Gudgeon ; Daniel Perez Hernandez ; Sam Werner ; Ariah Klages-Mundt ; Thomas Haines ; Aleksander Essex ; Andrea Bracciali ; Massimiliano Sala. Springer Science and Business Media Deutschland GmbH, 2023. pp. 250-271 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)).

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Baum, C, Hsin-yu Chiang, J, David, B, Frederiksen, TK & Gentile, L 2023, SoK: Mitigation of Front-Running in Decentralized Finance. in S Matsuo, L Gudgeon, D Perez Hernandez, S Werner, A Klages-Mundt, T Haines, A Essex, A Bracciali & M Sala (eds), Financial Cryptography and Data Security. FC 2022 International Workshops - CoDecFin, DeFi, Voting, WTSC, Revised Selected Papers. Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics), vol. 13412 LNCS, Springer Science and Business Media Deutschland GmbH, pp. 250-271, 26th International Conference on Financial Cryptography and Data Security, FC 2022, Saint George, Grenada, 2/05/22. https://doi.org/10.1007/978-3-031-32415-4_17

SoK: Mitigation of Front-Running in Decentralized Finance. / Baum, Carsten; Hsin-yu Chiang, James; David, Bernardo et al.
Financial Cryptography and Data Security. FC 2022 International Workshops - CoDecFin, DeFi, Voting, WTSC, Revised Selected Papers. ed. / Shin’ichiro Matsuo; Lewis Gudgeon; Daniel Perez Hernandez; Sam Werner; Ariah Klages-Mundt; Thomas Haines; Aleksander Essex; Andrea Bracciali; Massimiliano Sala. Springer Science and Business Media Deutschland GmbH, 2023. p. 250-271 (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics); Vol. 13412 LNCS).

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution › peer-review

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Baum C, Hsin-yu Chiang J, David B, Frederiksen TK, Gentile L. SoK: Mitigation of Front-Running in Decentralized Finance. In Matsuo S, Gudgeon L, Perez Hernandez D, Werner S, Klages-Mundt A, Haines T, Essex A, Bracciali A, Sala M, editors, Financial Cryptography and Data Security. FC 2022 International Workshops - CoDecFin, DeFi, Voting, WTSC, Revised Selected Papers. Springer Science and Business Media Deutschland GmbH. 2023. p. 250-271. (Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)). doi: 10.1007/978-3-031-32415-4_17