CRYPTO GUIDANCE INC.

Kansas City, MO

What Is Front-Running?

Front-running is trading ahead of someone else's known order to profit from the price impact their order will cause. In traditional markets it is a crime committed by insiders with privileged knowledge. In crypto, the mempool made everyone's pending orders public, and bots turned front-running into infrastructure.

How It Actually Works

A bot spots your pending buy of a token in the public pool.
It submits its own buy with a higher fee, landing before yours in the block. Your buy then executes against a price its purchase already pushed up.
The bot exits into the demand you supplied. Add a sell right after your trade and it becomes the full sandwich.
The same logic hits NFT sweeps, liquidation races, and any visible profitable intent. Speed and fee bidding decide winners among bots; the human whose order created the opportunity finances the contest.

Risks and Common Mistakes

Announcing intent before acting, on-chain or off. Publicly telegraphed buys are pre-sold to the bots.
Loose slippage on visible orders: the looser the tolerance, the bigger the extractable gap.
Assuming small trades are ignored. Extraction is automated and indifferent.

Defenses That Actually Help

Tight slippage limits, so hostile reordering makes your trade revert instead of fill badly.
Private transaction routing where available, skipping the public pool entirely.
Splitting size into smaller tranches and using limit-style execution on venues that support it.

When It Matters

Every visible on-chain trade, most acutely in thin pools, which is one more reason the memecoin arena costs more than its charts admit. The umbrella economics live under MEV.