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Front-Running Attacks in Blockchain Development

August 3, 2022

Blockchain Development is gaining popularity but, at the same time attackers are finding innovative strategies to crack the transactions on it. Transactions in Blockchain are broadcasted to the network, where the miners select transactions and validate them into a valid block. This block is later added to an immutable chain of blocks where the transactions are visible to the nodes before the miner processes the transaction and it is propagated to the nodes. This is where the front-running attack comes into the picture.

What is a front-running Attack? 

During this process, a malicious node can see the transaction, identify its purpose and send its own malicious request based on the initial transaction. Taking advantage of this process, the attackers add transactions to the blocks based on transaction fees. The attacker ensures his transaction processes before any other transaction by integrating a higher transaction fee with it. This is called a front-running attack in Blockchain Development. 

Which are the possible Front-end Attackers? 

Miners 

Miners can control the order of transaction execution and hence can conduct these attacks. They can blend their transactions without broadcasting them. 

Full Nodes 

Full nodes can see unconfirmed transactions. For Ethereum, gasPrice is a crucial factor for a profit-motivated miner to prioritize orders. The higher the gasPrice more the chances of transactions being selected. Thus, any Ethereum full node can front-run pending transactions by sending its own modified transactions with a higher price. 

How to Mitigate these front-running Attacks in Blockchain Development?

Front-running is the integral feature of Blockchain Development and transaction fees are a crucial part of this environment, thus its ability to pay for priority is not an implementation error. The easiest way to escape front-running attacks is to pay transaction fees high enough then the attackers. But this solution is expensive and thus is an unsustainable way of getting rid of these attacks. 

Transaction Sequencing

This method helps to tackle the asynchronous behavior of transactions. Ethereum selects these transactions that are stored in pending transaction pools while creating blocks. The transactions don’t have a predefined order for selection but, the miners can put them in arbitrary sequence. Since there are no rules, profits are possibly the primary reasons for miners to choose transactions from pools. 

FIFO (First-in-First-Out) is not-feasible for distributed ledgers since the order of transactions is not fixed. Thus, we have an alternative that is a trusted third party, that can be used to assign sequential numbers to transactions. But, this conflicts with Blockchain technology’s core innovation of distributed trust possibly adding a single point of failure. This can lead to an additional delay in the transaction validation process. 

Another alternative to this is sequencing transactions pseudo-randomly which is spotted in Bitcoin’s Canonical Transaction Ordering Rule. This rule makes front-running attacks statically difficult by adding a security layer and the system won’t be immune to these attacks. 

Zero Knowledge Proof 

Zero Knowledge Proof is an encryption protocol with probabilistic assessment. ZKP is a cryptographic method used to prove a specific piece of information without revealing the content of that knowledge. Zero Knowledge Proof of Work or Zero Knowledge Proof of Computation comes into the picture when a prover convinces the verifier about the correct execution of computation on secret data, without unveiling the confidential information. 

Wrap UP

Hopefully, the above article has enlightened your knowledge of front-running attacks and their remedies. If you have any queries related to Enterprise Blockchain Development, feel free to connect us. 

Are you looking for Enterprise Blockchain Development Services? Scroll yourself to our services and let’s take your project ahead. 
 

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