to profit from price changes your transaction will cause, essentially "cutting in line" to benefit from a large user trade for profit (like buying a token right before a big user buy pushes its price up). While it can serve legitimate functions like arbitrage for market balance, it often harms users through higher slippage and worse prices, creating unfair advantages for bots and malicious actors.

How it Works in DeFi:

1. Visibility: All pending transactions on a blockchain (like Ethereum) are visible in the mempool (or pending transaction pool) before they are confirmed into a block.
2. Observation: Bots or traders monitor this mempool for large trades (e.g., a big buy order for a specific token).
3. Gas Manipulation: The front-runner creates their own transaction (e.g., buying the same token) and pays a higher gas fee (transaction cost).
4. Execution: Because of the higher fee, the miner/validator includes the front-runner's transaction in the block before the victim's original transaction.
5. Profit: The front-runner's trade executes first, pushing the price up, and then the victim's large trade executes, further increasing the price, allowing the front-runner to sell for a quick profit (arbitrage or pure profit) at the victim's expense.

Examples:

1. DEX Trading: A bot sees a large buy order for Token X on a decentralized exchange (DEX), jumps in front with its own buy, then sells after the original order drives the price up.
2. Liquidations: In lending protocols, bots might front-run liquidations to seize collateral for themselves.

Impact:

1. Higher Costs: Users face increased price slippage (paying more than expected) and higher transaction fees.
2. Unfairness: Creates an unfair playing field where those with faster bots and more capital can consistently profit from others' trades.

Migration:

Tools like Flashbots help bundle transactions to hide them from the public mempool, reducing opportunities for front-running.