Frontrun
By CoinGecko | Updated on Aug 28, 2020
In traditional finance, frontrunning or tailgating is a practice where traders or brokers execute a trade before a prior large order is executed. The said trader or broker will then sell their trades higher to the large order, owing to the order's slippage tolerance. This is highly illegal and unethical in the traditional finance. In the cryptocurrency context, frontrunning works the same but in DEX's where orders made are broadcasted to the blockchain for all to see, a frontrunner will attempt to listen to the blockchain to pick up suitable orders to frontrun by orders on the market and placing enough fees to have the transaction mined faster than the target's orders.
Related Terms
Decentralized Finance (DeFi)
Decentralized Finance (DeFi) refers to the movement of building decentralized financial applications that have no central authority and is censorship free.
Trustless
Entirely verifiable, without needing to trust or assume an action is done completely and in good faith.
Zero Confirmation Transaction
Another name for "unconfirmed transaction"
Distributed Denial of Service (DDoS) Attack
A common cyber-attack tactic where a perpetrator diverts large amounts of traffic towards a particular network or service in an effort to disrupt normal services.
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