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
51% Attack
An attack on blockchain by a group of miners controlling more than 50% of network hash rate
Hashrate
Total processing power of a blockchain or what is the same, are the amount of hash values that can be made in a period of time.
Distributed Ledger Technology (DLT)
Describes the technology that enables distributed ledger.
SHA-256
Abbreviation of "Secure Hashing Algoritm - 256", SHA-256 is part of the SHA2 that allows one-way hashing of any data into a 64 character string.
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