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
Market Taker
Participant of the market who buys and sells from currently existing orders
Centralized
An organization structure wherein a small handful of actors have control over the entire network.
Proof-of-Authority (PoA)
A consensus algorithm that asigns block validation queue based on identity and reputation.
Stale Block
Double mined blocks that are not included in the blockchain.
Hungry for more knowledge?
Back to Glossary or Subscribe to our newsletter.