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

^*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-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 language	English
Title of host publication	Proceedings of the Financial Cryptography and Data Security, FC 2022 International Workshops
Volume	13412
Publication date	2023
Pages	250-271
ISBN (Print)	978-3-031-32414-7
DOIs	https://doi.org/10.1007/978-3-031-32415-4_17
Publication status	Published - 2023
Event	Financial Cryptography and Data Security: FC 2022 International Workshop - , Grenada Duration: 6 May 2023 → 6 May 2023

Workshop

Workshop	Financial Cryptography and Data Security
Country/Territory	Grenada
Period	06/05/2023 → 06/05/2023

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title = "SoK: Mitigation of Front-Running in Decentralized Finance",

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.",

author = "Carsten Baum and {Hsin-Yu Chiang}, James and Bernardo David and Frederiksen, {Tore Kasper} and Lorenzo Gentile",

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AU - Baum, Carsten

AU - Hsin-Yu Chiang, James

AU - David, Bernardo

AU - Frederiksen, Tore Kasper

AU - Gentile, Lorenzo

PY - 2023

Y1 - 2023

N2 - 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.

AB - 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.

U2 - 10.1007/978-3-031-32415-4_17

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

M3 - Article in proceedings

SN - 978-3-031-32414-7

VL - 13412

SP - 250

EP - 271

BT - Proceedings of the Financial Cryptography and Data Security, FC 2022 International Workshops

T2 - Financial Cryptography and Data Security

Y2 - 6 May 2023 through 6 May 2023

ER -

SoK: Mitigation of Front-Running in Decentralized Finance

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