Frontrun
By CoinGecko | Updated on Aug 28, 2020
In traditional finance, frontrunning or tailgating is a practice where traders or brokers execute a trade before a prior large order is executed. The said trader or broker will then sell their trades higher to the large order, owing to the order's slippage tolerance. This is highly illegal and unethical in the traditional finance. In the cryptocurrency context, frontrunning works the same but in DEX's where orders made are broadcasted to the blockchain for all to see, a frontrunner will attempt to listen to the blockchain to pick up suitable orders to frontrun by orders on the market and placing enough fees to have the transaction mined faster than the target's orders.
Related Terms
STO
Security Token Offering (STO) refers to a public offering for tokenized digital securities, or in short security tokens traded in cryptocurrency exchanges.
Emission
The speed/rate at which new coins are minted and released as dictated by the protocols written.
Derivatives Market
A market for derivatives which are instruments such as futures or options whose value is derived from an underlying asset.
Sell wall
Anomalously large sell order(s) at a single price point that reflects as a "wall" in the order book.
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