Front Running

The practice of observing pending transactions in a blockchain’s mempool and submitting a similar transaction with a higher gas fee to prioritize its confirmation, often to gain a financial advantage.

What is Front Running?

Front running in the context of digital assets and blockchain refers to a strategy where an entity, such as a trader, bot, or miner, monitors the mempool (a pool of pending transactions) and identifies a valuable transaction, such as a large token purchase or an Ethereum Name Service (ENS) domain registration. They then submit a similar transaction with a higher gas fee to ensure it is processed first by validators or miners, effectively cutting in line. This practice exploits the transparent nature of public blockchains like Ethereum, where pending transactions are visible before confirmation.

For example, if a trader submits a transaction to buy a rare NFT or register a desirable ENS domain, a front runner might detect it, submit an identical transaction with a higher gas fee, and secure the asset instead. This can lead to financial losses for the original sender or missed opportunities, as seen in decentralized finance (DeFi) trades where front runners capitalize on arbitrage opportunities. Front running contributes to Maximal Extractable Value (MEV), where miners or validators profit by reordering transactions, and has been a significant issue on Ethereum, prompting solutions like Flashbots’ MEV-Geth and MEV-Boost to mitigate its impact by moving such activities to off-chain auctions.

The practice is controversial, as it undermines fairness and can increase network congestion and gas fees. Discussions on platforms like X often highlight front running’s role in DeFi exploits, with users debating its ethics and advocating for private mempools or layer-2 solutions to reduce visibility of pending transactions. Tools like Flashbots’ MEV-Share, launched in 2023, also aim to refund users some MEV profits to offset losses from front running.