Glossary

Front running

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A practice of exploiting advance knowledge of a pending transaction to execute another trade first and profit from the subsequent price movement. On the blockchain, front running is typically realized through the mempool—the queue of unconfirmed transactions visible to all network participants. Specialized bots or validators monitor large incoming orders and submit their own transaction to buy the same token with a higher priority fee. As a result, the original large purchase pushes the price up, allowing the front-runners to immediately sell the newly acquired tokens at a higher price. The difference between the purchase and sale price becomes their profit, while the initiator of the original transaction ends up buying the asset at a less favorable price.