SoK: Mitigation of Front-running in Decentralized Finance

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

Paper 2021/1628

SoK: Mitigation of Front-running in Decentralized Finance

Carsten Baum

James Hsin-yu Chiang

Bernardo David

Tore Kasper Frederiksen

Lorenzo Gentile

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.

Note: The 2nd Workshop on Decentralized Finance (DeFi'22)

Metadata

Available format(s): PDF
Category: Applications
Publication info: Preprint.
Keywords: front-running miner extractable value decentralized finance
Contact author(s): cbaum @ cs au dk
jchi @ dtu dk
bernardo @ bmdavid com
tore frederiksen @ alexandra dk
lorg @ itu dk
History: 2022-07-19: last of 5 revisions; 2021-12-17: received; See all versions
Short URL: https://ia.cr/2021/1628
License: CC BY

BibTeX

@misc{cryptoeprint:2021/1628,
      author = {Carsten Baum and James Hsin-yu Chiang and Bernardo David and Tore Kasper Frederiksen and Lorenzo Gentile},
      title = {SoK: Mitigation of Front-running in Decentralized Finance},
      howpublished = {Cryptology ePrint Archive, Paper 2021/1628},
      year = {2021},
      note = {\url{https://eprint.iacr.org/2021/1628}},
      url = {https://eprint.iacr.org/2021/1628}
}