What are the most common front-running strategies used in the crypto industry?

3 answers

• celyesMar 21, 2025 · 4 months ago
  Front-running is a practice where traders take advantage of advance knowledge of pending transactions to execute their own trades before the original transaction is completed. This allows them to profit from the anticipated price movement caused by the original transaction. In the crypto industry, front-running can occur on decentralized exchanges (DEXs) and centralized exchanges. On DEXs, front-runners use bots to monitor pending transactions on the blockchain and quickly execute trades before the original transaction is confirmed. On centralized exchanges, front-runners may have access to order books and can execute trades based on the knowledge of pending large orders. Front-running can have a negative impact on the market as it can lead to unfair advantages and market manipulation.
  796

  398
• tdhe31May 13, 2022 · 3 years ago
  Front-running in the crypto industry is a controversial practice that involves taking advantage of non-public information to profit from upcoming trades. This can be done by placing orders ahead of known large transactions, causing the price to move in a favorable direction. Some common front-running strategies include monitoring blockchain transactions, analyzing order book data, and using high-frequency trading algorithms. While front-running can be profitable for those who engage in it, it is generally considered unethical and can harm market integrity.
  562

  188
• David Appiah-GyimahFeb 13, 2021 · 4 years ago
  Front-running is a common practice in the crypto industry, especially on decentralized exchanges. Traders who engage in front-running often use advanced trading bots to monitor pending transactions on the blockchain. When they detect a large transaction about to take place, they quickly execute their own trades to take advantage of the anticipated price movement. This strategy can be highly profitable, but it is also controversial as it gives the front-runners an unfair advantage over other traders. It is important for traders to be aware of front-running and take steps to protect themselves from its negative effects.
  625

  157