New Research Sheds Light on the Front-Running Bots in Ethereum’s Dark Forest

New research from the cryptocurrency wallet ZenGo has shed additional light on front-running attacks happening on the Ethereum blockchain.

First outlined in “Ethereum Is a Dark Forest,” DeFi investors Dan Robinson and Georgios Konstantopoulos called attention to a variety of attacks by bots that were roving the Ethereum blockchain in search of prey.

The new report from ZenGo outlines how the researchers identified and isolated generalized front-running bots while evaluating their efficiency and how likely a transaction is to get hunted down, while also testing how to evade them.

“Front-running in general is not something new on Ethereum,” said Alex Manuskin, a blockchain researcher at ZenGo, who conducted the research. “The novelty here is that we looked at bots that seek any profit, even in contracts they have never seen before, and even if these contracts are quite complex, and perform several internal calls to other contracts.”

Front-running

The ZenGo report described front-running as the “act of getting a transaction first in line in the execution queue, right before a known future transaction occurs.”

An exchange bid is an example of front-running. If someone is about to buy a large amount of ETH on Uniswap, to such an extent that it would drive the price higher, one way to cash in would be to buy ETH right before the large purchase goes through, then sell immediately after.

Ethereum front-running happens because bots are able to bid “a slightly higher gas price on a transaction, incentivizing miners to place earlier in the order when constructing the block. The higher paying transactions are executed first. Thus if two transactions making a profit from the same contract call are placed in the same block, only the first takes the profit, “ write the researchers.

“Under the surface of every transaction that finds its way to the blockchain, there are fierce wars over every bit of profit,” said Manuskin. “If you happened to come…

Read More