Mempool Front-Running

Mempool front-running is the practice of observing unconfirmed transactions in the transaction pool and injecting a competing transaction with a higher gas fee to be processed first. This allows the attacker to profit from the expected price movement caused by the original transaction.

In the context of decentralized exchanges, this is a common form of Maximal Extractable Value (MEV) that directly impacts the slippage experienced by users. By monitoring the mempool, automated bots can sandwich a user's trade, buying the asset before the user and selling it immediately after, effectively draining value.

This behavior creates a hidden tax on liquidity providers and traders. Mitigating this requires complex solutions like encrypted mempools or batch auction mechanisms that hide transaction order until final execution.