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Jimcrypted (talk | contribs) m (added link to Metamask) |
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Front running, also called a sandwich attack, occurs when an attacker buys an asset before a traders big purchase and sells right after (vice-versa for big sells). The price goes up after a big purchase and the attacker profits from the difference. This is common with AMMs like [[Uniswap]] because of [[Slippage]] and are often executed by [[MEV|MEV bots]]. | |||
== Front running in traditional finance == | == Front running in traditional finance == | ||
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=== How it works === | === How it works === | ||
When a user sends a transaction, like buying ETH on | When a user sends a transaction, like buying ETH on [[Uniswap]] with [[MetaMask]], the transaction gets sent to the [[Mempool]] (pending transactions) before included in a block (getting confirmed). A bot can detect this and send a buy order with slightly more gas. This ensures the bot's buy order executes before the user's. Bots usually sell immediately after. | ||
This results in users getting paying a higher price which bots profit off. | This results in users getting paying a higher price which bots profit off. | ||
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<references /> | <references /> | ||
[[Category:Tools]] | [[Category:Tools]] | ||
[[Category:Glossary]] |
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