Frontrunning

Frontrunning occurs when a market participant observes an incoming, unconfirmed transaction and intentionally submits their own transaction with a higher fee to be processed first. In the context of decentralized exchanges, a frontrunner might see a large buy order that will likely move the asset price upward.

By executing a buy order before the original transaction, the frontrunner captures the asset at a lower price and then sells it at the higher price once the original, larger order completes. This practice is predatory because it utilizes the transparency of the mempool to profit at the expense of the original trader.

It is essentially a form of market manipulation that relies on the speed of transaction propagation and fee prioritization. Frontrunning undermines the trust and fairness expected in automated market-making environments.