Front-Running Bots
Front-running bots are automated programs that monitor the public mempool for pending transactions and attempt to execute their own transactions ahead of others to profit. By paying a higher gas fee, these bots ensure their orders are included in a block before the target transaction.
This is often used to exploit slippage tolerance settings or to manipulate prices for gain. In the context of decentralized exchanges, this is a form of adversarial game theory where bots compete against retail traders.
While often viewed as predatory, some argue that these bots contribute to market efficiency by quickly closing arbitrage gaps. The rise of such bots has led to the development of private mempools and specialized transaction ordering services.
Understanding these bots is vital for any trader looking to protect their execution quality.