What Is Front Running?

Front running in the context of finance and trading, especially in the stock and cryptocurrency markets, is an unethical practice in which a broker or other entity executes an order on a security for its own account by exploiting advance information about a client's pending order. In simple terms, this occurs when a trader acts on information about an upcoming and not yet public transaction to gain an unfair advantage.

In the world of cryptocurrency and decentralized finance (DeFi), front running often occurs on blockchain networks and involves a person or bot seeing a pending transaction and quickly placing an order ahead of it, usually by paying higher gas fees for faster execution. This can manipulate the market price or outcome of the initial transaction to the advantage of the front runner.

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