What Is Front-running In Crypto Trading?
Front-running is a trading practice where someone with advance knowledge of a pending transaction places a trade to benefit from it. In crypto, especially within decentralized exchanges (DEXs), front-running can occur when bots or validators exploit transaction visibility in the mempool to profit ahead of others. This article explains how front-running works in Web3, why it's controversial, and how traders can protect themselves from it.
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đź•’ 6:10 PM
đź“… Oct 05, 2025
✍️ By chrison2
What Is Front-running?
In traditional finance, front-running happens when a broker uses insider knowledge of a client’s large trade to place a personal order first. In crypto, front-running is mostly algorithmic and automated, exploiting public transaction queues like the Ethereum mempool.
In DeFi, this can look like:
A bot detects your large buy order on a DEX
It places its own order first to push the price up
Your trade gets executed at a worse price
The bot sells immediately after, making a risk-free profit
This is sometimes referred to as a type of MEV (Maximal Extractable Value).
Why Is Front-running a Problem?
Front-running undermines fairness and efficiency in crypto markets. It affects regular users by:
Increasing slippage and transaction costs
Creating uneven playing fields for retail traders
Exploiting transparency that blockchains are built on
Encouraging arms races between trading bots
While not always illegal on decentralized platforms, it is widely criticized as unethical and damaging to user trust.
How to Avoid Front-running
To reduce exposure to front-running:
Use private RPC endpoints or “dark pools” (like CowSwap or 1inch Fusion)
Set slippage tolerance carefully
Avoid broadcasting large trades during volatile market conditions
Use wallets or tools with anti-MEV protection
Consider time delays or transaction batching for execution
Developers are also working on MEV-resistant protocols like Flashbots or SUAVE.