Commitment Against Front Running Attacks

TL;DR

This paper analyzes front-running attacks using game theory, introduces a commit-reveal protocol to mitigate severe attacks, and balances attack prevention with legitimate user competition.

Contribution

It presents a game-theoretic framework for front-running, proposes a commit-reveal protocol, and evaluates its effectiveness in reducing attack severity while maintaining fair competition.

Findings

The protocol prevents the most severe front-running attacks.

It preserves legitimate competition among honest users.

It reduces overall attacker expenditure.

Abstract

We provide a game-theoretic analysis of the problem of front-running attacks. We use it to distinguish attacks from legitimate competition among honest users for having their transactions included earlier in the block. We also use it to introduce an intuitive notion of the severity of front-running attacks. We then study a simple commit-reveal protocol and discuss its properties. This protocol has costs because it requires two messages and imposes a delay. However, we show that it prevents the most severe front-running attacks while preserving legitimate competition between users, guaranteeing that the earliest transaction in a block belongs to the honest user who values it the most. When the protocol does not fully eliminate attacks, it nonetheless benefits honest users because it reduces competition among attackers (and overall expenditure by attackers).