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 proceedingConference contributionpeer-review

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 languageEnglish
Title of host publicationFinancial Cryptography and Data Security. FC 2022 International Workshops - CoDecFin, DeFi, Voting, WTSC, Revised Selected Papers
EditorsShin’ichiro Matsuo, Lewis Gudgeon, Daniel Perez Hernandez, Sam Werner, Ariah Klages-Mundt, Thomas Haines, Aleksander Essex, Andrea Bracciali, Massimiliano Sala
PublisherSpringer Science and Business Media Deutschland GmbH
Pages250-271
Number of pages22
ISBN (Print)9783031324147
DOIs
StatePublished - 2023
Externally publishedYes
Event26th International Conference on Financial Cryptography and Data Security, FC 2022 - Saint George, Grenada
Duration: 2 May 20226 May 2022

Publication series

NameLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume13412 LNCS
ISSN (Print)0302-9743
ISSN (Electronic)1611-3349

Conference

Conference26th International Conference on Financial Cryptography and Data Security, FC 2022
Country/TerritoryGrenada
CitySaint George
Period2/05/226/05/22

Bibliographical note

Publisher Copyright:
© 2023, International Financial Cryptography Association.

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