Paper 2021/609

FairMM: A Fast and Frontrunning-Resistant Crypto Market-Maker

Michele Ciampi, Muhammad Ishaq, Malik Magdon-Ismail, Rafail Ostrovsky, and Vassilis Zikas


Frontrunning is a major problem in DeFi applications, such as blockchain-based exchanges. Albeit, existing solutions are not practical and/or they make external trust assumptions. In this work we propose a market-maker-based crypto-token exchange, which is both more efficient than existing solutions and offers provable resistance to frontrunning attack. Our approach combines in a clever way a game theoretic analysis of market-makers with new cryptography and blockchain tools to defend against all three ways by which an exchange might front-run, i.e., (1) reorder trade requests, (2) adaptively drop trade requests, and (3) adaptively insert (its own) trade requests. Concretely, we propose novel light- weight cryptographic tools and smart-contract-enforced incentives to eliminate reordering attacks and ensure that dropping requests have to be oblivious (uninformed) of the actual trade. We then prove that with these attacks eliminated, a so-called monopolistic market-maker has no longer incentives to add or drop trades. We have implemented and benchmarked our exchange and provide concrete evidence of its advantages over existing solutions.

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Preprint. MAJOR revision.
Contact author(s)
micheleciampi1990 @ gmail com
ishaq @ ishaq pk
magdon @ gmail com
rafail @ cs ucla edu
vzikas @ cs purdue edu
2022-03-30: last of 2 revisions
2021-05-17: received
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      author = {Michele Ciampi and Muhammad Ishaq and Malik Magdon-Ismail and Rafail Ostrovsky and Vassilis Zikas},
      title = {FairMM: A Fast and Frontrunning-Resistant Crypto Market-Maker},
      howpublished = {Cryptology ePrint Archive, Paper 2021/609},
      year = {2021},
      note = {\url{}},
      url = {}
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